Late adopters now are driving the cloud market, estimated to include $180 billion in revenues from public and private cloud hardware, software and services.

That’s according to the 2017 version of Bain & Company’s research, “The Changing Faces of the Cloud.” Cloud growth has been driven in large part by the changing profile of the cloud buyer, which has “significant implications” for technology vendors and technology selling partners, it said.

“Early adopters that fueled the first waves of cloud adoption are being joined and overtaken by larger and more mainstream customers that, until recently, had taken a wait-and-see approach,” said Mark Brinda, a partner in Bain’s global technology practice. “As a result, executives need to understand the transformation that the cloud market is going through — and make the necessary changes to their offerings and go-to-market and operating models to successfully serve the customers coming off the sidelines.”

In 2011, slow-and-steady customers had less than 1 percent of their applications, on average, in the cloud. In 2013, that number was at just 4 percent, but by 2015,16 percent of applications were in the cloud. That number is expected to reach 30 percent by 2018, according to Bain.

While this cluster demonstrates a higher preference for private cloud offerings, they are not waiting for compelling offers from legacy providers to begin migrating. Instead, they are branching out beyond the major cloud providers, such as IBM and Microsoft, and moving to public cloud players and smaller, newer vendors.{ad}

“This has created a shake-up among technology providers,” said Michael Heric, a Bain partner in the firm’s global technology practice.

In the meantime, cloud adoption among transformational customers, or early adopters, has nearly reached its peak, with their share of applications in the cloud estimated to flatten out at around 75 percent in 2018. In 2010, they generated 47 percent of the demand for cloud services. Today, they represent 26 percent of demand. However, they are “increasingly responsible for driving innovation and spreading cloud use across their organizations,” according to Bain.

Only about one in 10 companies buy based on cost, Bain said. The remaining nine want cloud investments to be cost-neutral, but are motivated by non-cost factors, such as uptime, flexibility, scalability, ease of use and security, it said.

“Cloud providers realized that they can’t compete on price alone,” Heric said. “In response, they’ve added services that make their platforms more valuable and easier to use, and customers are willing to pay for these features. This shift in thinking has been the main reason for cloud’s tremendous growth over these last few years.”

During the coming years, new buyers will increasingly drive demand for cloud services and “new competitive battlegrounds replace old market definitions,” according to Bain. As their preferences continue to change, Bain identified three areas of focus for technology providers: