The drive by enterprises to adopt off-premises cloud services is pushing the market to new heights while lining the pockets of cloud service providers, according to a new report.
According to research by IHS Markit, the global off-premises cloud service market is forecast to grow at a five-year compound annual growth rate (CAGR) of 19.9%, reaching $414 billion in 2022.
"To improve agility and realize cost savings, enterprises are migrating applications off-premises to the cloud," IHS Markit's Devan Adams, senior analyst, enterprise and IT, wrote in the report. "Upfront capital expenditures can be shifted to as-needed operating expenditures, by using off-premises cloud services—shifting from investments in equipment and staff to leveraging a cloud service provider’s automated data center infrastructure, supported by highly skilled data center experts."
In order to differentiate themselves from the competition, cloud service providers are looking for ways to innovate their service offerings by integrating machine learning (ML) and artificial intelligence (AI). By incorporating ML and AI, the cloud service providers are building up teams of experts that most enterprises can't duplicate, which means enterprises will be reliant on the cloud service providers' experts.
Cloud-as-a-service (CaaS) and platform-as-a-service (PaaS) are emerging markets in the off-premises cloud service market, and IHS Markit said they would continue their respective growth rates. CaaS is projected to have a five-year CAGR of 31.6% followed closely by PaaS with a five-year CAGR of 31.3% over the same time frame.
CaaS targets mainstream enterprises with a complete preconfigured application execution environment that could also be operated on their behalf by a CSP, according to Adams. PaaS targets developers with prebuilt application components that allow the application developer to focus on authoring only the business logic specific to their application while operations are left to the cloud service provider.
The IHS Markit report also highlighted the following cloud service partnerships that are driving the evolution of multicloud enviroments:
- Adobe, Microsoft and SAP partnered to introduce the Open Data Initiative, designed to provide customers with a complete view of their data across different platforms.
- Digital Realty extended the connections of its Digital Realty Service Exchange to many of the leading cloud service providers.
- Google Cloud and Cisco announced a partnership that improved the connection between Google G suite and Cisco WebEx.
- Amazon Web Service (AWS) and Salesforce expanded their alliance, adding new product integrations for customers to share and synchronize data across AWS and Salesforce Lightning.
- China Telecom and Huawei established a Business Joint Innovation Center (BJIC) to jointly develop information and communication services and go-to-market plans.