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Public cloud market exploding, driven by IaaS and PaaS adoptions

Investments in cloud computing are skyrocketing, and the worldwide public cloud services market is projected to grow by a staggering 17.5 percent this year alone.

To put that growth in dollar terms, the total value of the cloud market is predicted to total $214.3 billion, up from $182.4 billion in 2018, according to Gartner Research.

Gartner has recently released a comprehensive study of the cloud computing market - Forecast: Public Cloud Services, Worldwide, 2016-2022, 4Q18 Update - which looks at where the largest investments in cloud computing are. Information Management spoke with Gartner analyst Sid Nag, author of the report, about the study’s key findings.

Information Management: What were the most significant findings of the Gartner study on cloud services?

Sid Nag: There were several key findings:

  • The worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total $214.3 billion, up from $182.4 billion in 2018.
  • Demand for integrated infrastructure as a service (IaaS) and platform as a service (PaaS) offerings is driving the next wave of cloud infrastructure adoption as organizations seek interoperable functionality that enables highly integrated, synchronized and orchestrated hybrid environments.
  • The fastest-growing market segment will be cloud system infrastructure services, or infrastructure as a service (IaaS), which is forecast to grow 27.5 percent in 2019 to reach $38.9 billion
  • Gartner expects that by the end of 2019, more than 30 percent of technology providers’ new software investments will shift from cloud-first to cloud-only.

IM: How do these findings compare with previous studies by Gartner?

Nag: IaaS was forecast to reach $30.5 billion in 2018, and in 2019 it is forecast to grow 27.5 percent to reach $38.9 billion. Gartner’s 2017 IaaS public cloud marketshare showed that the market grew 29.5 percent in 2017 to total $23.5 billion, up from $18.2 billion in 2016.

IM: What findings most surprised you?

Nag: There were no real surprises. Public cloud continues to grow at the rate as expected and as cloud adoption matures.

IM: What specific market segments are driving the most growth in cloud adoption? Why so?

Nag: The fastest-growing market segment will be cloud system infrastructure services, or infrastructure as a service (IaaS), which is forecast to grow 27.5 percent in 2019 to reach $38.9 billion, up from $30.5 billion in 2018. The second-highest growth rate of 21.8 percent will be achieved by cloud application infrastructure services, or platform as a service (PaaS). This is because organizations are adopting cloud in a big way in what we call the cloud 2.0 wave. They are no longer building out their data centers but are instead consuming infrastructure from IaaS providers, to save on Capex spend.

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The growth of PaaS is predicated by the growth of databases as a services (for example, AWS’s dBPaaS is growing the fastest due to organizations looking to get away from the on premises legacy database vendors and moving to a more cost effective and choice rich options for database technologies provided in an as a service model).

As cloud adoption has become mainstream, organizations are increasingly looking to acquire not only cloud IaaS resources themselves, but also the automated management of those resources, management tools delivered as services, and cloud software infrastructure services.

IM: What specific market segments are most reluctant to invest in cloud adoption? Why so?

Nag: While business process as a service (BPaaS) is the highest In terms of market size and revenue from a dollars and cents perspective, it is growing at 7.6%. This is an indication of a combination of market stabilization and also as service providers adapt to significant changes, including the growing influence of business leaders in technology investment decisions — an adjustment that will pose significant challenges to many providers.

IM: How are organizations generally deciding where to invest – public cloud, private or hybrid model?

Nag: It is based on an organization’s digital business transformation and digital initiative needs as well as application migration needs. Several issues such as cost, organizational biases, data residency, application rationalization/migration, governance, compliance etc. are factors.

IM: Many organizations have expressed fears about data security in the cloud. What is the current view?

Nag: Gartner believes the public cloud is more secure than any on premises data center environment and the security in cloud largely a “red herring” and an urban myth.

IM: What lessons have been learned from early adopters of cloud computing that organizations should pay heed to?

Nag: There are several lessons that we have learned. They include:

  • Don’t move to the cloud to save costs right away.
  • Cloud is secure. Carefully identify applications and workloads that are candidates to move to the cloud.
  • Retool your organizational structure to adopt and adapt to the new world of cloud.
  • Stop swiping credit cards and stand up random cloud instances in an irrationally exuberant manner.
  • Look before you leap.
  • Build a cloud strategy.

IM: What are some best practices to help organizations be most successful with cloud computing and to keep their data assets most secure?

Nag: Probably the most important are as follows:
Take a cloud-first approach.

  • Build a living cloud strategy document, if you haven’t already. It’s never too late.
  • Form a cloud strategy council with members from across the enterprise and identify a cloud czar that promotes a cloud first or a cloud only approach.
  • Separate cloud strategy from implementation plan. If you have a combined cloud strategy/adoption plan, refactor it into two documents
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