Missed last cloud reports? Here are the Top Cloud Predictions and Trends for 2018

May 17, 2018

Digital transformation is evolving IT and businesses faster than ever, also pushing for new ideas and best practices to maintain a profitable spot in the market. Companies must adapt to this rapidly changing business environment, they must transform and adjust themselves on a constant basis or they are going to be out of their industry altogether. In the global and fragmented business environment, we firmly believe that Cloud Computing is the foundation for companies' efficiency and innovation.

The Global Cloud Market keeps growing

With a value of $146 billion in 2017, it shouldn't be a surprise that the global cloud market continues to grow exponentially. According to Forrester's prediction, the market value will jump to $178 billion this year and will keep growing at 22% CAGR, on track to reach $277 billion in 2021.

We see a big movement towards Public Cloud and still, according to the Forrester report, it will accelerate and enhance the consumption race with a forecast of $44 billion in 2018. Looking at the numbers, we can confirm that the cloud transformation journey is advancing at a rapid pace and organizations are shifting a larger share than ever of their IT applications to the cloud.

SaaS is the largest Cloud Segment

If we dig into the three main cloud services, Software as a Service (SaaS) is the largest segment, capturing two-thirds of all public cloud spending and holding nearly 69% of overall cloud market share. Infrastructure as a Service (IaaS) is the second largest category counting for 17.8%, followed by Platform as a Service (PaaS) with 13.6% cloud market share. Regarding the year-over-year growth of the three-primary cloud segments, the situation is completely opposite with 50.2% for PaaS, 38.1% for IaaS and 22.9% for SaaS.

According to Gartner, SaaS is expected to outpace the total cloud market with a revenue growth from $58.6B in 2017 to $99.7B in 2020. The SaaS leadership can be explained by its ease of use, 3rd party integration and above all, financial savings which the service provides. The latter benefits especially small and medium businesses, which have the highest forecast growth for this year. If we think about the increasing role of Artificial Intelligence, Machine Learning, and Internet of Things and their integration in SaaS products, it will affect exponentially the overall SaaS market and business adoption.

The US is the no.1 market for public cloud

In 2018, the United States continues to be the biggest spender on public cloud with its $97 billion accounting for over 60% of the global market. Western Europe is the second largest market, with the United Kingdom and Germany as first and second largest spenders and with $7.9 billion and $7.4 billion respectively. Japan with $5.8 billion and China with $5.4 billion spending, close the top 5 global countries for cloud consumption.

Compared to the US other countries seem to have fallen behind, but it is not true that they are missing the digital transformation wave. The public cloud just keeps on growing everywhere in the world with increases in spending on cloud services and infrastructure easily outpacing overall IT spending.

Azure is gaining ground on AWS

The three cloud giants, Amazon, Microsoft and Google still lead the global cloud market. Although Amazon Web Service (AWS) continues to lead public cloud adoption, its market share dropped 6% last year and Microsoft Azure and Google Cloud are catching up, growing at a faster rate. Especially Azure which is gaining ground on AWS, with its revenue growing 98% and almost doubled year-over-year. Microsoft Azure is continuing to gain momentum, and this is also confirmed by the latest RightScale State of the Cloud report.

With the study surveying over 1000 technical respondents on their adoption of cloud, the interesting takeaway is the Azure leadership for organizations who have just begun their cloud journeys: 49% Azure vs 47% AWS implementation. Although we are unsure about the rise, downfall and future lead within the top three, they will keep dominating the cloud market. Forrester predicts a near-monopoly by the big three with AWS, Google, and Azure capturing 76% of all cloud platform revenue in 2018, expanding to 80% by 2020. Cloud computing is without any doubt, one of the key players in the digital transformation journey for enterprises. Cost reductions, scalability and time to market provided by cloud adoption, are imperative advantages for business productivity and for companies to stay up-to-date and ahead of competition. All signs point toward the continued growth of cloud computing in the following years and with Amazon, Microsoft and Google ruling the global consumption.

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