Louis Columbus | Forbes
The latest round of cloud computing and enterprise software forecasts reflect the growing influence of analytics, legacy systems integration, mobility and security on IT buyer’s decisions.
Bain & Company and Gartner have moved beyond aggregate forecasts, and are beginning to forecast by cloud and SaaS adoption stage. SAP is using the Bain adoption model in their vertical market presentations today.
Despite the predictions of the demise of enterprise software, forecasts and sales cycles I’ve been involved with indicate market growth. Mobility and cloud computing are the catalysts of rejuvenation in many enterprise application areas, and are accelerating sales cycles. Presented in this roundup are market sizes, forecasts and compound annual growth rates (CAGRs) for ten enterprise software segments.
Key take-aways from the latest cloud computing and enterprise software forecasts are provided below:
- Software as a Service (SaaS) and cloud-based business application services will grow from $13.4 billion in 2011 to $32.2 billion in 2016, a five-year CAGR of 19.1%. Source: Market Trends: Platform as a Service, Worldwide, 2012-2016, 2H12 Update Published: 5 October 2012 ID:G00239236.
- Public and private cloud computing will be strong catalysts of server growth through 2015. IDC reports that $5.2B in worldwide server revenue was generated in 2011 or 885,000 units sold. IDC is forecasting a $9.4B global market by 2015, resulting in 1.8 million servers sold. Source: IDC Worldwide Enterprise Server Cloud Computing 2011–2015 http://www.idc.com/getdoc.jsp?containerId=228916
- IDC reports that enterprise cloud application revenues reached $22.9B in 2011 and is projected reach $67.3B by 2016, attaining a CAGR of 24%. IDC also predicts that by 2106, $1 of every $5 will be spent on cloud-based software and infrastructure. Report, Worldwide SaaS and Cloud Software 2012–2016 Forecast and 2011 Vendor Shares, Link: http://www.idc.com/getdoc.jsp?containerId=236184
- According to the Cisco Global Cloud Index, global cloud traffic will account for nearly two-thirds of total data center traffic by 2106. Cisco is forecasting cloud traffic as a percent of total data center traffic will grow from 39% in 2011 to 64% in 2016. Cisco is also predicting that by 2016, three out of five data center workloads will be processed in the cloud. The Cisco Global Cloud Index also includes many insightful documents including the Cisco Global Cloud Index: Forecast and Methodology, 2011–2016 and the Cisco Global Cloud Index Supplement: Cloud Readiness Regional Details. The following video provides an excellent analysis of the Top Trends behind the Cisco Global Cloud Index (2011 — 2016).
- 11% of companies are transformational, early adopters of cloud computing, attaining 44% adoption (as defined by % of MIPS) in 2010, growing to 49% in 2013. This same segment will reduce their reliance on traditional, on-premise software from 34% to 30% in the same period according to Bain & Company’s cloud computing survey results shown below. SAP is using this adopter-based model in their vertical market presentations, an example of which is shown here.
- Bain and Company has defined a Cloud Go-To-Market System and is actively promoting it in their research insights and other publications. Examples of Bain’s research on cloud computing include Selling the cloud, The five faces of the cloud, How Rackspace turns customers into brand fanatics, and Identifying and monetizing cloud computing’s five customer types. The Bain and Company Cloud Go-To-Market Strategy framework is shown below.
- Gartner is predicting Infrastructure-as-a-Service (IaaS), cloud management & security devices, and Platform-as-a-Service (PaaS) are growing from $7.6B in 2011 to $35.5B in 2016, a CAGR of 36%. Source: Forecast Analysis: Enterprise Infrastructure Software, Worldwide, 2011-2016, 3Q12 Update Published: 18 October 2012 ID:G00234775.
- The global Platform-as-a-Service (PaaS) market is growing from $900M in 2011 to $2.9B in 2016, achieving a 26.6% CAGR. At this projected rate, PaaS will generate an average of $360M a year in revenue between 2011 and 2016. Gartner projects that the largest segments will be Application Platform Services (aPaaS) which generated 35% of total PaaS spending in 2011, followed by cloud application lifecycle services (12.5). Source: Market Trends: Platform as a Service, Worldwide, 2012-2016, 2H12 Update Published: 5 October 2012 ID:G00239236.