The worldwide public cloud services market will grow 17% in 2016 to $208.6 billion, up from $178 billion in 2015, according to a forecast by Gartner Inc.

The highest growth will come from cloud system infrastructure services or infrastructure as a service (IaaS), which is projected to grow 43% in 2016. Cloud application services, or software as a service (SaaS), is expected to grow 22% in 2016 to reach $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, said Sid Nag, research director at Gartner.

"However, the aspiration for using cloud services outpaces actual adoption,” Nag said. “There's 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, many organizations still have no current plans to use cloud services, Nag said.

IT modernization is the top driver of public cloud adoption, the report said, followed by cost savings, innovation, agility and other benefits.

The focus on IT modernization shows a more sophisticated and strategic use of public cloud services, Gartner said.

Not only are public cloud services being used to recognize the tactical benefits of cost savings and innovation, but they’re also being used to establish a more modern IT environment that can serve as a strategic foundation for future applications and digital business processes.

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