Enterprise cloud services revenue will grow to USD31.9 billion worldwide by 2017, Analysys Mason report

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Analysys Mason comment by Steve Hilton, Principal Analyst

1 February 2013 - The worldwide market for enterprise cloud-based services will grow from USD18.3 billion in 2012 to UD31.9 billion in 2017 (see Figure 1). The year-on-year growth rate will be 17% in 2013, but will decrease during the next five years as the size of the cloud services market increases overall. Software-as-a-service (SaaS) accounted for 66% of revenue in 2012, while 33% was related to infrastructure-as-a-service (IaaS). This revenue split will change during the next five years, as the share of revenue from IaaS increases to 43% by 2017.

Analysys Mason's recently published Enterprise cloud services: worldwide forecast 2012–2017, created as part of the Enterprise programme, covers SaaS and IaaS. It provides a five-year forecast of cloud services revenue worldwide, split into four enterprise size segments, four channels to market, eight geographical regions and 12 countries (see Figure 2).

Figure 1: Enterprise cloud services revenue by enterprise size segment, and communications service providers (CSPs)' share of revenue, developed markets' share of revenue and year-on-year growth rate, worldwide, 2012–2017 [Source: Analysys Mason, 2013]

The growth of enterprise cloud services is slower than in previous forecasts

The enterprise public cloud services market continues to grow, but at a slower overall rate than in our previous forecast, particularly in developed countries. We define 'public cloud services' as the provision of applications or infrastructure in a hosted, multi-tenancy model, where pricing is generally structured as a recurring charge. This slowing of growth is the result of difficult economic conditions worldwide and slower-than-anticipated adoption of new IT technology by both large and small enterprises.

In developed countries, revenue from enterprise cloud services will increase from USD17.0 billion in 2012 to USD28.7 billion in 2017, at a CAGR of 11%. In emerging markets, revenue from such services will remain far smaller, increasing from USD1.2 billion in 2012 to USD3.2 billion in 2017, at a CAGR of 20.9%. The share of worldwide enterprise public cloud services revenue generated from emerging markets will be slightly above 10% by 2017 – up from 7% in 2012.

Communications service providers (CSPs) will account for an increasing share of enterprise cloud services sales as they bundle more offerings with core connectivity. CSPs will become more adept at offering a high-quality cloud solution with network- and application-level SLAs, which will drive more enterprises to adopt cloud services. CSPs will be responsible for 18% of total worldwide enterprise cloud services revenue by 2017. CSPs will account for 12% of worldwide revenue from enterprise cloud services in 2012, down from 14% in our previous forecast, as CSPs continue to position themselves as ICT providers rather than communications providers to large enterprises and small and medium-sized enterprises (SMEs).

SMEs – that is, enterprises with between 1 and 249 employees – accounted for 43% of total public cloud services revenue by the end of 2012. SMEs often have fewer security-related concerns than large enterprises when adopting cloud services, but are slower overall to adopt new technology solutions. We expect the proportion of revenue from SMEs to increase to 49% by 2017, because:

·  SMEs' awareness of public cloud solutions will continue to increase

·  the usability of SME cloud services will continue to increase as vendors and CSPs create affordable, easy-to-use solutions

·  CSPs will continue to add solutions to their portfolios that are targeted towards SMEs.

Figure 2: Sub-categories in Analysys Mason's enterprise cloud services forecast [Source: Analysys Mason, 2013]

Solutions

Business segments

Channels to market

Regions

Countries

Software-as-a-service (SaaS)

Micro business
(1–9 employees)

Communications service provider

Caribbean and Latin America

Austria

Infrastructure-as-a-service (IaaS)

Small business (10–49 employees)

Vendor-direct

Central and Eastern Europe

Denmark

 

Medium business (50–249 employees)

Registered IT partner

Developed
Asia–Pacific

Finland

 

Large business (250+ employees)

 

Emerging
Asia–Pacific

France

 

 

 

The Middle East
and North Africa

Germany

 

 

 

North America

Italy

 

 

 

Sub-Saharan Africa

Netherlands

 

 

 

Western Europe

Norway

 

 

 

 

Spain

 

 

 

 

Sweden

 

 

 

 

Switzerland

 

 

 

 

UK

 

Analysys Mason's Enterprise programme will continue to research cloud services during 2013. This research will include a series of Reports and Viewpoints on particular applications, infrastructure solutions, and vendor and CSP successes and failures. Our SME Strategies programme looks more deeply at cloud services solutions for SMEs with particular emphasis on mobile device management, unified communications, back-up/storage and remote desktop management.

Ends ...

For all press enquiries, contact Gina Ghensi or Kate Brown at press@analysysmason.com or telephone +44 (0)845 600 5244

About Analysys Mason (www.analysysmason.com)

Analysys Mason is a global consultancy and research company specialising in telecoms, media and technology (TMT).  Our clients in the TMT sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, our consultants have developed rigorous methodologies that deliver real-world results for clients around the world. In terms of our research, the world's leading network operators, vendors, regulators and investors subscribe to our research and rely on our insight to inform their decision making.

Media contact:

Gina Ghensi / Kate Brown
Press Office
Analysys Mason
Tel: +44 (0)845 600 5244
Email: press@analysysmason.com
Web: http://www.analysysmason.com

Analysys Mason report

Analysys Mason comment by Steve Hilton, Principal Analyst

1 February 2013 - The worldwide market for enterprise cloud-based services will grow from USD18.3 billion in 2012 to UD31.9 billion in 2017 (see Figure 1). The year-on-year growth rate will be 17% in 2013, but will decrease during the next five years as the size of the cloud services market increases overall. Software-as-a-service (SaaS) accounted for 66% of revenue in 2012, while 33% was related to infrastructure-as-a-service (IaaS). This revenue split will change during the next five years, as the share of revenue from IaaS increases to 43% by 2017.

Analysys Mason's recently published Enterprise cloud services: worldwide forecast 2012–2017, created as part of the Enterprise programme, covers SaaS and IaaS. It provides a five-year forecast of cloud services revenue worldwide, split into four enterprise size segments, four channels to market, eight geographical regions and 12 countries (see Figure 2).

Figure 1: Enterprise cloud services revenue by enterprise size segment, and communications service providers (CSPs)' share of revenue, developed markets' share of revenue and year-on-year growth rate, worldwide, 2012–2017 [Source: Analysys Mason, 2013]

The growth of enterprise cloud services is slower than in previous forecasts

The enterprise public cloud services market continues to grow, but at a slower overall rate than in our previous forecast, particularly in developed countries. We define 'public cloud services' as the provision of applications or infrastructure in a hosted, multi-tenancy model, where pricing is generally structured as a recurring charge. This slowing of growth is the result of difficult economic conditions worldwide and slower-than-anticipated adoption of new IT technology by both large and small enterprises.

In developed countries, revenue from enterprise cloud services will increase from USD17.0 billion in 2012 to USD28.7 billion in 2017, at a CAGR of 11%. In emerging markets, revenue from such services will remain far smaller, increasing from USD1.2 billion in 2012 to USD3.2 billion in 2017, at a CAGR of 20.9%. The share of worldwide enterprise public cloud services revenue generated from emerging markets will be slightly above 10% by 2017 – up from 7% in 2012.

Communications service providers (CSPs) will account for an increasing share of enterprise cloud services sales as they bundle more offerings with core connectivity. CSPs will become more adept at offering a high-quality cloud solution with network- and application-level SLAs, which will drive more enterprises to adopt cloud services. CSPs will be responsible for 18% of total worldwide enterprise cloud services revenue by 2017. CSPs will account for 12% of worldwide revenue from enterprise cloud services in 2012, down from 14% in our previous forecast, as CSPs continue to position themselves as ICT providers rather than communications providers to large enterprises and small and medium-sized enterprises (SMEs).

SMEs – that is, enterprises with between 1 and 249 employees – accounted for 43% of total public cloud services revenue by the end of 2012. SMEs often have fewer security-related concerns than large enterprises when adopting cloud services, but are slower overall to adopt new technology solutions. We expect the proportion of revenue from SMEs to increase to 49% by 2017, because:

·  SMEs' awareness of public cloud solutions will continue to increase

·  the usability of SME cloud services will continue to increase as vendors and CSPs create affordable, easy-to-use solutions

·  CSPs will continue to add solutions to their portfolios that are targeted towards SMEs.

Figure 2: Sub-categories in Analysys Mason's enterprise cloud services forecast [Source: Analysys Mason, 2013]

Solutions

Business segments

Channels to market

Regions

Countries

Software-as-a-service (SaaS)

Micro business
(1–9 employees)

Communications service provider

Caribbean and Latin America

Austria

Infrastructure-as-a-service (IaaS)

Small business (10–49 employees)

Vendor-direct

Central and Eastern Europe

Denmark

 

Medium business (50–249 employees)

Registered IT partner

Developed
Asia–Pacific

Finland

 

Large business (250+ employees)

 

Emerging
Asia–Pacific

France

 

 

 

The Middle East
and North Africa

Germany

 

 

 

North America

Italy

 

 

 

Sub-Saharan Africa

Netherlands

 

 

 

Western Europe

Norway

 

 

 

 

Spain

 

 

 

 

Sweden

 

 

 

 

Switzerland

 

 

 

 

UK

 

Analysys Mason's Enterprise programme will continue to research cloud services during 2013. This research will include a series of Reports and Viewpoints on particular applications, infrastructure solutions, and vendor and CSP successes and failures. Our SME Strategies programme looks more deeply at cloud services solutions for SMEs with particular emphasis on mobile device management, unified communications, back-up/storage and remote desktop management.

Ends ...

For all press enquiries, contact Gina Ghensi or Kate Brown at press@analysysmason.com or telephone +44 (0)845 600 5244

About Analysys Mason (www.analysysmason.com)

Analysys Mason is a global consultancy and research company specialising in telecoms, media and technology (TMT).  Our clients in the TMT sectors operate in dynamic markets where change is constant. We help shape their understanding of the future so they can thrive in these demanding conditions. To do that, our consultants have developed rigorous methodologies that deliver real-world results for clients around the world. In terms of our research, the world's leading network operators, vendors, regulators and investors subscribe to our research and rely on our insight to inform their decision making.

Media contact:

Gina Ghensi / Kate Brown
Press Office
Analysys Mason
Tel: +44 (0)845 600 5244
Email: press@analysysmason.com
Web: http://www.analysysmason.com