SaaS Market Will Top $241 Billion In 2020

SaaS Market

Independent research firm Forrester Research expects the global cloud computing market to reach $241 billion in 2020 compared to $40.7 in 2010, according to a new Forrester report called “Sizing the Cloud”. The report aims to provide insights into the future market size of cloud computing segment while trying to predict market growth dynamics in a new IT environment driven by rapidly growing number of cloud computing services and applications.

Forrester’s report provides market forecast on 12 different market segments for the next decade, forecasting shifts in the usage patterns of cloud infrastructure, business applications for the cloud and cloud platforms that are becoming increasingly widespread.

According to Sizing the Cloud report, Software-as-a-Service (SaaS) offers more growth opportunity than any other segment in the still largely vague market for cloud computing services. SaaS will retain its position as a leading segment in cloud computing with SaaS market growing three-fold to $92.8 billion by 2016, the report said. In contrast, Infrastructure-as-a-service (IaaS) will witness a rapid growth in the next few years but Forrester expects dynamic infrastructure services to perform better than IaaS in the long term.

Cloud Computing Market

Forrester applies an innovative approach toward measuring cloud computing market with company’s analysts utilizing Forrester’s sizing methodology for emerging markets to the cloud computing market for the first time, report co-author Stephen Reid wrote in a blog post. Reid admits that cloud computing definitions are still a serious challenge to researchers while “… each year, it gets harder to make clear-cut distinctions, based on technology, between what is a cloud and what is simply a virtualized data center or a traditional hosting provider. Therefore, Forrester decided to focus instead on the major disruption in the IT industry that cloud computing is bringing about — disruption based not on technology but on the business model under which IT operates.”

Reid also reveals that IaaS will shift from public clouds to virtual private clouds but the size of market is set to decrease because dynamic infrastructure services, which are the virtual private cloud counterpart of IaaS in the public cloud, tend to combine pure infrastructure with high-level services and close integration into existing on-premises landscapes. Simplified and pre-integrated platforms outline the future of Platform-as-a-service (PaaS) segment while PaaS is set to become a middleware platform alternative, Reid said.

Thus, Sizing the Cloud report supports a common view amongst analysts that cloud computing research market will witness tremendous growth in the foreseeable future. The market will grow six times within a decade, according to Forrester, which is typical only for new and relatively underdeveloped markets. However, all segments of the cloud computing market will be influenced by the overall state of the economy and global demand for IT services. Some world regions are slow to adopt cloud-based solutions while in other parts of the world managers are eager to deploy products and services utilizing the power of cloud computing.

Such a rapid market growth is a double-edged sword in terms of business opportunities and average corporate performance within the cloud computing sector. Some enterprises will benefit from the booming cloud computing market and even larger number of start-ups and established enterprises will try to set foot in the SaaS, IaaS and PaaS segments. However, a vast number of companies are expected not to make their way to the top and close doors following the appearance of too many market players in a lucrative yet limited market for cloud computing services. Only those that are able to adapt quickly to fast changing market conditions will be crowned victors and will grab the lion’s share of a $241 billion cloud computing market in 2020.

By Kiril Kirilov

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