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article imagePublic cloud revenue to reach $260bn this year due to SaaS demand

By James Walker     Oct 13, 2017 in Technology
The public cloud services market is expected to grow by 18.5% during 2017 to a total of $260bn. Market analysts Gartner said the increase is being led by "faster than expected" growth in SaaS and IaaS products, supplemented by growing confidence in PaaS.
Revenue from SaaS products is expected to reach $58.6 billion this year, up 21 percent over 2016. IaaS is climbing even faster with revenue predicted to hit $34.7 billion, up 36.6 percent. Companies pursuing digital transformation strategies are creating a period of high demand for providers of cloud infrastructure and services, causing the boom in IaaS sales.
Enterprises are adopting platform-as-a-service (PaaS) options too. As the cloud takes off, businesses are gaining confidence in making long-term investments that determine how their digital services are supplied, maintained and run. Gartner said large organisations are rapidly becoming sold on the idea of "as-a-service" models.
"Strategic adoption of platform as a service (PaaS) offerings is also outperforming previous expectations, as enterprise-scale organizations are increasingly confident that PaaS will be their primary form of application development platform in the future," said Sid Nag, Gartner research director.
"SaaS is also growing faster in 2017 than previously forecast, leading to a significant uplift in the entire public cloud revenue forecast."
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The boom isn't significantly disrupting existing industry dynamics. Amazon, Microsoft, Alibaba and others are merely consolidating their positions as the market's largest providers. Gartner said the top 10 public cloud providers will account for 70 percent of all revenue through 2021 as businesses lack confidence in entrusting their services to smaller firms.
Cloud-based technologies are now gaining acceptance as the future of industry and digital business. Firms are coming to realise the benefits of SaaS, IaaS and PaaS, such as improved agility, consolidated infrastructure and lower maintenance requirements. Demand is still growing, a trend Gartner said will continue through 2021 as cloud technologies mature and more businesses digitally transform.
However, providers are still facing perception issues that need to be addressed. Problems around cybersecurity and long-term reliability are the top concerns from IT leaders tasked with purchasing new cloud infrastructure. To maximise their audience, providers need to ensure they don't sit still as their revenue grows.
Maintaining and securing cloud networks is a complex and ongoing requirement, particularly while business leaders are still unfamiliar with the underlying concepts. Cybersecurity should remain a top consideration in public cloud services if the industry is to maintain its momentum.
More about Cloud, public cloud, Digital, digital transformation, digital disruption
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