Application containers will experience strong growth over the next three years as the market matures and enterprise adoption skyrockets. Analyst firm 451 Research predicts that containers will have a compounded annual growth rate (CAGR) of 40 percent, growing from a $762 million business in 2016 to a nearly $2.7 billion business by 2020.

Containers will definitely be a bright spot in the cloud-enabling technology space, but the overall cloud market will also experience strong growth. 451 Research expects the cloud-enabling tech market to grow at a CAGR of 15 percent from $23.1 billion in 2017 to $39.6 billion at year-end 2020.

Interestingly, 451 Research compares the container market to the OpenStack market because both are based on open source software and attract both startups and established vendors. 451 says that its analysts believe enterprise adoption of containers and maturity of the market will happen more quickly than OpenStack.

451 Research currently tracks 125 application container vendors and expects new entrants to emerge quarterly. According to Lay Lyman, principal analyst, cloud management and containers at 451 Research, the company started tracking 30 container vendors in 2013 and has added 91 more vendors. But the large number of vendors doesn’t necessarily mean that all are making money.

“Just as we saw with OpenStack, revenue generation in the early application container market is characterized by some pure-play vendors and larger established vendors generating significant revenue, but most players are just beginning to realize paid engagements,” Lyman said.

451 Research does expect enterprises to continue to test and deploy containers. In a 2016 survey of enterprise IT buyers conducted by the research firm, it found that of the 25 percent of enterprises surveyed who said they use containers, 34 percent were in broad implementation of production applications, and 28 percent had started initial implementation of production applications with containers.

However, 451 does note that there is rapid consolidation occurring in the container space, and it expects that to continue.

In August Cisco announced it was acquiring Container X. And in May Apprenda acquired Kismatic, a startup that offers a commercial version of Kubernetes.