6 Cloud Growth Areas to Watch According to Analysts

Written by Nicole Henderson
February 22, 2017

Gartner and IDC have released their latest forecasts around cloud adoption and spending through 2020. Here's what you need to watch as you navigate the next three years in the cloud.

IDC and Gartner this week have come out with the latest numbers around cloud growth and spending through 2020. According to IDC, overall public cloud spending will experience a 21.5 percent compound annual growth rate (CAGR) – nearly 7x the rate of overall IT spending growth. Public cloud spending will reach $203.4 billion worldwide in 2020.

Software as a service (SaaS) will remain the dominant cloud computing type, according to the IDC Worldwide Semiannual Public Cloud Services Spending Guide, capturing nearly two-thirds of cloud spending in 2017, and growing to 60 percent in 2020.

According to Gartner, software as a service is expected to grow 20.1 percent to reach $46.3 billion in 2017, and will remain the second largest segment in the global cloud services market.

Gartner says that an increasing maturity of SaaS offerings, particularly human capital management (HCM) and customer relationship management (CRM), will see the SaaS market experience slightly slower growth over the next few years.

"As enterprise application buyers are moving toward a cloud-first mentality, we estimate that more than 50 percent of new 2017 large-enterprise North American application adoptions will be composed of SaaS or other forms of cloud-based solutions," Sid Nag, research director at Gartner said in a statement. "Midmarket and small enterprises are even further along the adoption curve. By 2019, more than 30 percent of the 100 largest vendors' new software investments will have shifted from cloud-first to cloud-only."

IDC said that SaaS growth will be eclipsed by spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), which will grow at much faster rates than SaaS with five-year CAGRs of 30.1 percent and 32.2 percent, respectively.

"As cloud adoption expands over the next four years, what clouds are and what they can do will evolve dramatically – in several important ways,” Frank Gens, senior vice president and chief analyst at IDC said in a statement. “The cloud will become more distributed (through Internet of Things edge services and multicloud services), more trusted, more intelligent, more industry and workload specialized, and more channel mediated. As the cloud evolves these important new capabilities – what IDC calls 'Cloud 2.0' – the use cases for the cloud will dramatically expand.”

Click through the slideshow to view 6 cloud growth areas to watch.