Small and medium sized businesses [SMBs] will push cloud services spending past $125 billion [£75 million] globally by 2016 as organisations almost double the amount of services being used.
Research carried out for Parallels’ fourth SMB Cloud Insights report showed that the market will grow at a compound annual growth rate [CAGR] of 26 per cent and follows a year in 2013 when the cloud services market reached $62 billion [£32.1 billion].
“SMBs are becoming more sophisticated in their use of IT and also demanding best of breed solutions. Parallels software is proven to enable service providers to make the cloud work for businesses,” said Birger Steen, CEO of Parallels.
Dividing the cloud market up into its separate specialities shows that Communication and Collaboration, including business class email and hosted PBX service, is growing faster than any other part of the cloud sector. This is manifested in its CAGR of 37 per cent that has seen the market grow from $4.8 billion [£2.8 billion] in 2012 to $6.5 billion [£3.8 billion] in 2013 and by 2020 it’s expected to reach $20 billion [£12 billion].
Infrastructure as a service [IaaS] is the second fastest growth segment and will have a 27 per cent CAGR over the coming years meaning it will increase to be worth more than $42 billion [£25 billion] by the close of 2016.
In addition, the amount of cloud services being used by SMBs is forecast to grow from five to nine by 2016 as companies continue to rely on the cloud to perform services in the future.
Parallels’ report also states that the US SMB cloud market is currently worth some $24 billion [£14.4 billion] and will grow at a CAGR of 17 per cent through to 2017. Much of this growth is driven by unified communications and other online business applications that will experience 32 per cent and 16 per cent CAGR rises through 2017.
Related: 5 ways the cloud can help SMBs
Earlier research carried out by Parallels showed that the UK SMB cloud sector is set to hit £2.5 billion by 2016 and companies continue to invest in fully hosted cloud solutions to drive growth – IaaS the most lucrative area.