Public cloud services spending will reach $56.6 billion in 2014 and grow to more than $127 billion in 2018, according to a new forecast from International Data Corp. (IDC).

That represents a five-year compound annual growth rate (CAGR) of 22.8%, which is about six times the rate of growth for the overall IT market, IDC says. In 2018, public IT cloud services will account for more than half of worldwide software, server and storage spending growth, it says.

One of the factors driving public cloud services growth is the adoption of "cloud first" strategies by both IT vendors expanding their offerings and IT buyers implementing new solutions. More important, IDC says, the cloud services market is now entering an "innovation stage" that will produce an explosion of new solutions and value creation on top of the cloud.

One prime example: During the Google Cloud Platform Live conference yesterday, Google unveiled seven major cloud moves that will drive down pricing, speed workloads, and perhaps even easy mobile app development tied to the cloud. Chief rival Amazon will surely return fire during the AWS re:Invent 2014 conference (Nov. 11-14, 2014).

Many new solutions will be in industry-focused platforms that will reshape not only how companies operate their IT, but also how they compete in their own industry. As the number of applications and use cases grow, cloud services will reach into almost every business-to-business and consumer services marketplace.

"Over the next four to five years, IDC expects the community of developers to triple and to create a ten-fold increase in the number of new cloud-based solutions," Frank Gens, senior vice president and chief analyst at IDC, said in a statement. "Many of these solutions will become more strategic than traditional IT has ever been. At the same time, there will be unprecedented competition and consolidation among the leading cloud providers.”

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