Worldwide cloud services revenue is forecast to reach $68.3 billion in 2010, a 16.6 percent increase from 2009 revenue of $58.6 billion, according to Gartner, Inc.

 

"We are seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity," said Ben Pring, research vice president at Gartner. "The scale of application deployments is growing; multi-thousand-seat deals are increasingly common. IT managers are thinking strategically about cloud service deployments; more-progressive enterprises are thinking through what their IT operations will look like in a world of increasing cloud service leverage. This was highly unusual a year ago."

 

Cloud computing refers to a pay-per-use model of computing, where applications and software are accessed over the Internet and not owned by users. Gartner estimates that, over the course of the next five years, enterprises will spend $112 billion cumulatively on software as a service (SaaS), platform as a service (PaaS), and infrastructure as a service (IaaS), combined.

 

Gartner said it is seeing an acceleration of adoption of cloud computing and cloud services among enterprises and an explosion of supply-side activity as technology providers maneuver to exploit the growing commercial opportunity.

 

The North American and European markets represent the largest markets from a geographic perspective, and while other geographies around the world will experience growth, this growth will not notably alter the overall weighting away from the larger, more-mature regions over the course of the next five years. The U.S. share of the worldwide cloud services market was 60 percent in 2009 and will be 58 percent in 2010, but by 2014, this will be diluted to 50 percent as other countries and regions begin to adopt cloud services in more-significant volumes. Western Europe is expected to account for 23.8 percent of the cloud services market in 2010, and Japan will represent 10 percent. In 2014, the U.K. is forecast to account for 29 percent of the market, while Japan will represent 12 percent of cloud services revenue.

 

In industry terms, the financial services and manufacturing industries are the largest early adopters of cloud services. Communications and high-tech industries are also leveraging the cloud in significant volume, while the public sector is also clearly interested in the potential of cloud services and its share of the overall market.

 

However, Pring said that, although interest in cloud computing has grown, many enterprises still have strong concerns about the idea of cloud computing and cloud-computing products as well as cloud services. Security is primary among these, while other concerns include availability of service, vendor viability and maturity. "Many enterprises may be examining cloud computing and cloud services, but are far from convinced that it is appropriate for their requirements," he said. "We expect that this will be a significant opportunity for existing IT services players to evolve their current offerings — such as outsourcing, system integration, development, etc. — to become cloud-enabled and try to combine the best of the two worlds, namely traditional IT services and cloud computing."