Worldwide Cloud Services Market to Surpass $68 Billion in 2010

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. The industry is poised for strong growth through 2014, when worldwide cloud services revenue is projected to reach $148.8 billion.

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.

More fundamentally, cloud computing has become more material, because the challenges inherent in managing technology based on the principles of previous eras -- complex, custom, expensive solutions managed by large in-house IT teams -- have become greater, and the benefits of cloud computing in addressing these challenges have matured to become more appropriate and attractive to all types of enterprises.

Gartner 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. 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.

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