Public IT Cloud Services Spending to Reach $72.9 Billion in 2015, Capturing Nearly Half of Net New Spending Growth in Five Key Product Segments, According to IDC

FRAMINGHAM, Mass., June 20, 2011 – Cloud computing will continue to reshape the IT landscape over the next five years as spending on public IT cloud services expands at a compound annual growth rate (CAGR) of 27.6%, from $21.5 billion in 2010 to $72.9 billion in 2015. But the impact of cloud services will extend well beyond IT spending, according to new research from International Data Corporation (IDC). Cloud services are a critical component in a much larger transformation that IDC expects will drive IT industry growth for the next 25 years.

"Cloud services are interconnected with and accelerated by other disruptive technologies, including mobile devices, wireless networks, big data analytics, and social networking," said Frank Gens, senior vice president and chief analyst at IDC. "Together, these technologies are merging into the industry's third major platform for long-term growth. As during the mainframe and PC eras, the new platform promises to radically expand the users and uses of information technology, leading to a wide and entirely new variety of intelligent industry solutions."

As a critical component to the third platform, cloud services represent a strategic growth area for virtually all IT vendors. With spending for public IT cloud services growing at more than four times the rate of the worldwide IT market as whole, IDC expects one of every seven dollars spent on packaged software, servers, and storage offerings in 2015 will be related to the public cloud model. Moreover, the winners of the cloud platform wars will likely be the new power brokers of the IT industry.

Additional findings from IDC's research include:

In 2015, public cloud services will account for 46% of net new growth in overall IT spending in five key product categories – applications, application development and deployment, systems infrastructure software, basic storage, and servers.

Software-oriented cloud services (SaaS) will account for roughly three quarters of all spending on public cloud IT services throughout the forecast. This includes all three software-oriented cloud categories, not just applications. Spending on hardware-oriented cloud services (servers and storage) will be largely driven by SaaS providers building out their infrastructure.

The United States will dominate overall spending throughout the forecast period, with nearly 50% of all public IT cloud services revenues coming from the U.S. in 2015. But regions outside the U.S. will show much stronger growth as cloud services adoption accelerates. In particular, IDC found that there are more cloud services vendors and greater end user spending in Asia/Pacific and Western Europe than previously thought.

IDC defines public IT cloud services as those offerings designed for, and commercially offered to, a largely unrestricted marketplace of potential users. The forecast does not include revenue from private cloud deployments, which are dedicated to a specific customer. While private clouds provide the customer with the ability to specify access limitations and the level of resource dedication beyond what is currently available in public cloud offerings, IDC's expectation is that public clouds will mature and eventually incorporate many of the capabilities (particularly security and availability) that make private clouds a more attractive option today.

The IDC study, Worldwide and Regional Public IT Cloud Services 2011-2015 Forecast (IDC #228485) forecasts revenue growth from public IT cloud services through 2015, segmented by five functional categories within eight regions/countries. The forecast data, driven by IDC's key assumptions for public IT cloud services development and adoption, lead to this document's key conclusions regarding cloud offerings' revenue and growth impacts on the IT industry, customer adoption shifts among the five IT cloud services categories, and shifting adoption patterns among the eight regions/countries.

For more information about the impact of cloud services, please go to IDC's Cloud Research Resource Center.