The off-premises cloud services market is expected to reach $374 billion in 2022, at a five-year compound annual growth rate (CAGR) of 17.7 percent, according to new research from IHS Markit.
Rather than calling the category “public cloud,” IHS Markit is calling it “off-premises cloud” because “public cloud, in our opinion, is an architecture and is only one architecture for services supplied by cloud service providers,” said IHS analyst Cliff Grossner, who was one of the authors of the research, “Cloud Services for IT Infrastructure and Applications Market Tracker.” Its off-premises cloud category includes infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), software-as-a-service (SaaS), and cloud-as-a-service (CaaS).
IHS defines these as follows:
- IaaS includes data center facilities, servers, network, storage, database, network (layer 4) applications, and management; but does not include CaaS;
- CaaS provides an application execution environment; it includes servers, network, storage, management, and data center orchestration software (cloud OS); purchased as a bundle and priced based upon usage;
- PaaS provides an application development and execution environment; includes application run-time and middleware (web servers, database management systems), servers, network, storage, management, and data center orchestration software (cloud OS); purchased as a bundle and priced based upon usage;
- SaaS provides a complete application with a pay-per-use pricing model; includes applications such as customer relationship management (CRM), enterprise resource planning (ERP), collaboration, security, management, virtual desktop, and business analytics.
Cloud service providers that IHS tracked for its research include Amazon, Alibaba, Baidu, IBM, Microsoft, Salesforce, Google, Oracle, SAP, China Telecom, Equinix, Digital Realty, Deutsche Telekom, Tencent, China Unicom, and others.
According to IHS, CaaS is expected to grow 56 percent in 2018, with a five-year CAGR of 29 percent. And PaaS will grow 55 percent, with a five-year CAGR of 31 percent.
These numbers are high. But Grossner said, “These are still relatively small markets. As they mature and get larger, even though the absolute revenue numbers continue to get larger, the percentage of growth will drop off.”
IBM continued to lead the market for SaaS in 2017, with 18 percent of revenue. Amazon led IaaS, with 41 percent of revenue. Microsoft topped the list for PaaS, with 26 percent of revenue. And Microsoft’s lead in CaaS continued, with 21 percent revenue.
North America, the birthplace of off-premises cloud services, will remain the lead market through 2022, delivering about 53 percent of all global off-premises cloud services revenue, according to IHS.