Worldwide public cloud services market to grow 18 per cent this year

SaaS is expected to remain the second largest segment in the market.

The global public cloud services market is expected to grow 18 per cent this year, according to Gartner’s latest report. Totalling $246.8 billion (up from $209.2bn last year), the growth will mostly come from IaaS, which is expected to grow 36.8 per cent and reach $34.6 billion.

The growth will also be fuelled by SaaS (20.1 per cent, to $46.3 billion).

"The overall global public cloud market is entering a period of stabilisation, with its growth rate peaking at 18 per cent in 2017 and then tapering off over the next few years," said Sid Nag, research director at Gartner. "While some organisations are still figuring out where cloud actually fits in their overall IT strategy, an effort to cost optimise and bring forth the path to transformation holds strong promise and results for IT outsourcing (ITO) buyers. Gartner predicts that through 2020, cloud adoption strategies will influence more than 50 per cent of IT outsourcing deals."

SaaS offerings will mature in the years to come, which will result in a somewhat slower growth over the next few years. This is mostly related to human capital management and customer relationship management, as well as the increase in buying of financial applications. 

Despite its maturing, SaaS is expected to remain the second largest segment in the market.

"As enterprise application buyers are moving toward a cloud-first mentality, we estimate that more than 50 per cent of new 2017 large-enterprise North American application adoptions will be composed of SaaS or other forms of cloud-based solutions," said Mr Nag. "Midmarket and small enterprises are even further along the adoption curve. By 2019, more than 30 per cent of the 100 largest vendors' new software investments will have shifted from cloud-first to cloud-only."

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