Public Cloud Services Market to grow 17%, reach USD 208.6 billion in 2016: Gartner

IT Modernization Is Top Driver of Public Cloud Adoption

The worldwide public cloud services market is projected to grow 17.2% in 2016 to total USD 208.6 billion, up from USD 178 billion in 2015, according to Gartner. The highest growth will come from cloud system infrastructure services (IaaS), which is projected to grow 42.8% in 2016. Cloud application services (SaaS), one of the largest segments in the global cloud services market, is expected to grow 21.7% in 2016 to reach USD 38.9 billion.


Growth of public cloud is supported by the fact that organizations are saving 14% of their budgets as an outcome of public cloud adoption, according to Gartner's 2015 cloud adoption survey. However, the aspiration for using cloud services outpaces actual adoption. There is no question there is great appetite within organizations to use cloud services, but there are still challenges for organizations as they make the move to the cloud. Even with the high rate of predicted growth, a large number of organizations still have no current plans to use cloud services.


IT modernization is currently the top driver of public cloud adoption, followed by cost savings, innovation, agility and other benefits. The focus on IT modernization indicates a more sophisticated and strategic use of public cloud services. Not only are public cloud services being used to recognize the tactical benefits of cost savings and innovation, but they are also being used to establish a more modern IT environment — an environment that can serve as a strategic foundation for future applications and digital business processes.


Security and/or privacy concerns continue to be the top inhibitors to public cloud adoption, despite the strong security track record and increased transparency of leading cloud providers.


While public cloud usage will continue to increase, the use of private cloud and hosted private cloud services is also expected to increase at least through 2017. The increased use of multiple public cloud providers, plus growth in various types of private cloud services, will create a multi-cloud environment in most enterprises and a need to coordinate cloud usage using hybrid scenarios.


Although hybrid cloud scenarios will dominate, there are many challenges that inhibit working hybrid cloud implementations. Organizations that are not planning to use hybrid cloud indicated a number of concerns, including: integration challenges, application incompatibilities, a lack of management tools, a lack of common APIs and a lack of vendor support. In the case of hybrid cloud, these top concerns also highlight some of the top opportunities for providers.

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