Gartner Group has been shuffling its tarot cards and reached the conclusion that worldwide public cloud services continue to rise, which will reach $260 billion for the year 2017.
The market research firm said that strong SaaS and IaaS performance is driving growth for the calendar year. The latest report projected the market to grow by 18.5 per cent year-on-year to total $260.2 billion, up from $219.6 billion last year.
Gartner research director Sid Nag said the final data for 2016 showed that software as a service (SaaS) revenue was far greater in 2016 than expected, reaching $48.2 billion.
“SaaS is also growing faster in 2017 than previously forecast, leading to a significant uplift in the entire public cloud revenue forecast.”
He said: “Strategic adoption of platform as a service (PaaS) offerings is also outperforming previous expectations, as enterprise-scale organizations are increasingly confident that PaaS will be their primary form of application development platform in the future. This accounts for the remainder of the increase in this iteration of Gartner’s public cloud services revenue forecast.”
SaaS revenue is expected to grow 21 percent in 2017 to reach $58.6 billion, as the acceleration in SaaS adoption can be explained by providers delivering nearly all application functional extensions and add-ons as a service.
The highest revenue growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 36.6 percent in 2017 to reach $34.7 billion.
Gartner still expects growth to even out from 2018 onwards, because it has obtained mainstream status and maturity. Gartner expects 70 percent of public cloud services revenue to be dominated by the top 10 public cloud providers through 2021.
Gartner is forecasting an uptake in public cloud spending and IaaS is going to be the main winner.
It looks like resellers that have taken the effort to specialise in infrastructure as a service (IaaS) are going to be laughing all the way to the bank for the next year or so.
Beancounters at Big G say that IaaS as the main area to benefit from a general upswing in customer spending on public cloud services.
They expect worldwide spending on public cloud services to increase by 18 per cent this year, which equates to $246.8 billion.
The IaaS market is expected to grow by 36.8 percent with SaaS not too far behind with a 20.1 percent. The SaaS market is expected to slow a bit quicker because it is further along in the maturity cycle and a lot of customers are already using HR and sales applications in the cloud.
Customer attitudes towards public cloud have improved as firms like Amazon have been successful at promoting the idea of putting data onto their platforms. Sid Nag, research director at Gartner said that while fears about security are still out there but there is also a pressure towards digital transformation strategies and an acceptance from most users that the public cloud will play some role in their future.
“The overall global public cloud market is entering a period of stabilization, with its growth rate peaking at 18% in 2017 and then tapering off over the next few years,” he said .
“While some organizations are still figuring out where cloud actually fits in their overall IT strategy, an effort to cost optimize and bring forth the path to transformation holds strong promise and results for IT outsourcing (ITO) buyers. Gartner predicts that through 2020, cloud adoption strategies will influence more than half of IT outsourcing deals,” he added.
Although he is not backward about coming forward at the best of times, Oracle Chief Technology Officer Larry Ellison has been talking up his outfit’s Cloud business lately, claiming it is doing rather well because if its SaaS presence.
Ellison claims Oracle’s cloud business is “defying conventional wisdom” by accelerating while it expands and this is because of its presence in the SaaS market where rivals are not competing.
“We think we have a fighting chance to be the first SaaS company to make it to $10 billion in annual revenue,” Ellison said.
Oracle is a number two SaaS vendor and had a total SaaS and PaaS revenue of $2.2 billion during fiscal 2016, up 49 percent from the year before. The top SaaS vendor, Salesforce made $6.67 billion in 2016 and expects its 2017 revenue to be $8.08 billion.
Public cloud IaaS leader Amazon Web Services said in April that it’s on track to hit $10 billion in revenue this year.
The cloud accounted for around eight percent of Oracle’s quarterly revenue, but this business to continue growing even faster in Oracle’s fiscal 2017.
Ellison also said Oracle is seeing “a huge amount of demand” for IaaS from its existing SaaS and database customers, which wish to avoid the data migration costs associated with AWS and other cloud vendors.
Oracle has made significant data centre efficiency advancements and can now offer lower costs, better security and superior reliability than any other provider in the market, he added.
The use of Software as a Service (SaaS) by enterprises is becoming “mission critical”, according to a survey by IT market research company Gartner.
Gartner said that cost and agility are the main reasons for SaaS cloud adoption by enterprises, based on a survey involving four countries in four regions around the world.
Joanne Correia, a research VP at Gartner, said that the most common reasons for using SaaS were to develop and test production and mission-critical workloads.
“We’ve seen a real transition from use cases in previous surveys where early SaaS adoption focused on smaller pilot projects. This is an affirmation that more businesses are comfortable with cloud deployments beyond the front office running sales force automation and email,” she said.
Of those surveyed, 44 percent thought overall cost reduction was the main reason for investment in SaaS. But CIOs and senior IT project managers rated adoption not only because of cost but because of operational agility and giving their businesses an advantage over competitors.
Gartner believes that few enterprises will completely migrate to SaaS and instead will mix that with traditional on premises deployment.
Outside of the USA, many enterprises still worry about security, privacy and “fear of government snooping”.
Traditional on premise deployments will shrink from 34 percent in 2014 to 18 percent by 2017.
A major Chinese IT player – Tencent Cloud – has signed a memorandum of understanding to cooperate with IBM to bring Software as a Service (SaaS) for various industries.
Both firms will concentrate on emerging small and medium enterprises in healthcare and other fields.
Tencent Holdings is one of the major providers of internet services in mainland China, and its Cloud division sells to enterprises and developers a number of offerings.
Taosang Tong, a senior executive VP of IBM said: “Tencent has a stable and reliable cloud computing platform, while IBM has abundant industry expertise aimed at the enterprise.”
Nancy Thomas, a managing partner at IBM China said the two companies will bring scale and cost benefits of cloud computing to Chinese enterprises. “The industry dimension makes this especially appealing for businesses,” she said.
Financial considerations were not disclosed.
SaaS firm intY claimed that it has forged a “historic agreement” with the mighty Microsoft related to Office 365. SaaS stands for software as a service.
It will offer what it dubs a recurring revenue resale model to its high volume partners. That means, said intY that its partners can resell rather than just recommend Office 365 – meaning better margins and the ability to sell more services.
Chris Baldock, the chief executive officer of intT, said its major partners had problems with the referral only model. One sticking point was Microsoft’s billing relationship that prevented complementary services being offered by the channel on one invoice.
“This agreement puts our larger channel partners firmly back in the driving seat. They become a reseller with margin and value add.”
Customer adoption, added Baldock, is pretty much reliant on channel partners for migration, support and integration.
So the firm is adding Office 365 for resale in its CASCADE mix.
HP said that its distributor and partner Westcoast will use its Converged Cloud offering to woo the reseller base.
The investment is over £1 million and will mean Westcoast will offer its resellers cloud services, to manage Microsoft Lync, Exchange and SharePoint in the distributors’ IL3 data centre.
The move, said HP, means that Westcoast customers – that is to say its resellers – will be able to use current credit lines as well as take part in a partner programme which includes training and support.
Duncan Forsyth, Westcoast’s MD said that the era of onsite IT is becoming IT in the cloud. “We want to support both,” he said. HP Converged Cloud will let his company deliver IaaS (infrastructure as a service) and SaaS (software as a service) for resellers with a minimal need for capital investment.
The system will effectively be based on HP products including Proliant Bladesystem c7000 enclosures with BL460c Gen 8 blades using Intel Xeon chips. The system will also use SoreServ storage systems, HP tape libraries and HP 5400 Switch series.
HP exec Michael Clifford said that managing and using data centres “frighten many resellers” but using its systems will help resellers to see clearly through the mists of the cloud and offer quality cloud services.
Businesses needing to implement new processes and procedures across different sites may well be thanking their lucky stars today, after German software colossus Software AG unveiled something called Process Live.
Process Live is described as “a cloud based service integrating social collaboration with process improvement”, which loosely means that you can put things like your HR services (contracts, hiring and firing) in the cloud and make them available across different territories – rather than locking them away in separate systems where no one can find what they need.
Being software-as-a-service (SaaS), Process Live is intended to offer Software AG’s customers all the usual benefits of scaling up as well as down, instant switching on and off, and so on.
Singapore-based management consultancy firm, the Litmus Group, is using Process Live and Fabian Erbach, Partner at Litmus quoted by Software AG thus: “Process Live gives us the opportunity to start process improvement projects immediately and to dynamically scale them based on demand and maturity.”
“We are giving access to the speed and accuracy of a process driven business to departments and organisations of any size”, said Software AG CTO Wolfram Jost. “With a fully scalable investment model, business users have direct access to powerful process improvement tools when and for how long they need them – without having to involve the IT department.”
The launch of Process Live took place at Software AG’s user conference, Innovation World, which was held in San Francisco.
Market research company IDC has gazed in its crystal ball or inspected a set of entrails and has concluded that worldwide spending on public IT cloud services will be worth $47.4 billion this year.
And there’s more to come, according to the auspices. By 2017, spending will reach $107 billion meaning that between then and now sales will grow by 23.5 percent, compounded annually.
The analysts believe that cloud services are blowing into a chapter two phase where mobile, social and big data will become interdependent.
Chief IDC diviner Frank Gens calculates thus: “Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings. The emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs to CXOs of all types.”
Virtual private clouds help to persuade organisations that the cloud is not dangerous but instead has a silver lining.
By 2017, according to Gens, public IT cloud services will account for seventeen percent of IT product spend. Software as a service (SaaS) will keep the biggest chunk of the pie, and account for 59.7 percent of revenues in 2017, while fast growing categories include the dreadfully named “platform as a service” (PaaS) and the almost equally gruesome “Infrastructure as a Service” (IaaS) with compound annual growths of 29.7 percent and 27.2 percent.
Cloud integration is one of the hottest tech trends around and spending on cloud-based services is set to continue for years to come.
Ovum predicts worldwide spending on cloud integration platforms will grow at a compound annual growth rate of 31 percent between 2012 and 2018. It is expected to hit $3.7 billion by the end of 2018.
Spending in America will grow at 27 percent, while EMEA should see a rate of 34 percent. Spending on cloud-based integration platforms in the UK and Ireland should grow even faster, at a CAGR of 36 percent, eventually reaching $170 in 2018. Other parts of Western Europe, such as Benelux and DACH regions will grow at 32 and 36 percent.
Ovum senior analyst Saurabh Sharma said the emergence of integration-as-a-service ushers in a new era – “middleware-as-a-service”. He pointed out that such services are focused on enabling faster SaaS integration at a lower cost of ownership, reports Cloud Pro.
“Integration-platform-as-a-service (iPaaS) is an extension of the functionality provided by [integration-as-a-service]. iPaaS solutions enable users to create, manage, and govern integration flows connecting a wide range of applications or data sources,” he said.
Sharma said most organisations originally adopted iPaaS as a tool to achieve SaaS integration, but eventually extended it to on-premise and B2B integration.
Michael Dell’s plan to spin off Dell Inc has hit a serious roadblock.
Last week Carl Icahn revealed he owned a big chunk of Dell and hit out at the original private equity proposal in conjunction with Microsoft and Silver Lake Partners..
And today, it seems, Icahn has stepped up the pressure by threatening it with legal action unless it accepted his plans to pump fresh cash into the multinational.
According to the Wall Street Journal, Icahn has signed a confidentiality agreement with Dell. But, the Journal said, the special committee that Dell set up to consider its future is reluctant to take the Icahn routemap.
Instead, it appears to be hoping that others will come forward to its aid. A number of partners has been slated including Dell rival Hewlett Packard – but it appears unlikely that HP will take a punt.
Meanwhile, business continues as usual, with Dell making a couple of product announcements. It is creating a mobile strategies division that will develop custom applications for corporations, and advise large enterprises about mobility needs.
And it continues to push into the cloud – announcing that Dell Boomi will offer a data management and integration system, using MDM tools based on software as a service (SaaS).