The global market for on-premises cloud offerings is expected to skyrocket through 2027 and rival spending on public cloud IaaS.

That’s according to Wikibon’s third annual True Private Cloud research study, which anticipates the market growing from $32 billion this year to more than $260 billion by 2027.

Wikibon’s Peter Burris

“CIOs realize they can’t simply shove all their data into the public cloud,” said Peter Burris, Wikibon’s chief research officer. “Rather, organizations are bringing the cloud experience to their data through modern infrastructure that we call true private cloud.”

On-premises cloud revenue grew more than 50 percent last year to exceed $20 billion, bolstered by maturing vendor products and services, according to the study. The top five players in software-led offerings via indirect channels were VMware, with 24 percent share, followed by Nutanix, HPE, Microsoft and IBM.

The leading sellers of on-premises cloud offerings were Dell EMC, with 29 percent share, followed by HPE, Cisco, Nutanix and Oracle.

On-premises cloud mimics many of the attributes of public cloud while allowing customers to build hybrid infrastructure where much of the data remains within and under the control of an organization’s data center.

Traditional hosting companies such as IBM, Rackspace, DXC, Fujitsu and Accenture will account for $11 billion in spending this year in this space.

A variety of advanced, data-first application patterns will drive demand for on-premises cloud, according to the study. These include: IoT; advanced analytics, especially in use cases that use an enterprise’s sensitive information; social media; and applications that employ artificial intelligence (AI) technologies to automate or augment operations and engagement.

Together, using these applications, about 4 billion users are generating nearly 3 exabytes of data per day. An important portion of that data will move to public clouds, but more than 90 percent will stay local or be discarded, Wikibon said.