Cloud computing has become the cornerstone for the delivery of mobile and content services and an alternative to traditional enterprise computing systems over the last decade. As businesses transition to a digital-first economy, cloud computing jobs will play an increasingly important, if not dominant, role as the IT industry focuses on delivering greater efficiency, flexibility, and faster innovation.
Given its central role in the future enterprise, International Data Corporation (IDC) predicts that “whole cloud” spending – total worldwide spending on cloud services, the hardware and software jobs components underlying the cloud supply chain, and professional/managed services opportunities centered on cloud services – will exceed $1.3 trillion by 2025 while maintaining a compound annual growth rate (CAGR) of 10%.
“In today’s digital-first world, business outcomes and innovation are increasingly tied to the ability to develop and use innovative technologies and services anywhere, as quickly as possible. Cloud is the foundation for meeting this need,” said Rick Villars, group vice president, Worldwide Research at IDC. “Entire industries want to intelligently leverage data to their advantage and can do so because they have faster access to digital technologies built on a cloud foundation.”
IDC’s forecast looks at both shared (public) cloud services and dedicated (private) cloud services. These are defined as follows: Shared (public) cloud services are shared among unconnected organizations and customers, available to many potential users, and developed for a market rather than a single enterprise.
Dedicated (Private) cloud services are supplied to enterprise customers as subscriptions or managed service agreements by cloud, colocation, outsourcing, or managed service providers.
Shared (Public) Cloud as a Service for infrastructure, platforms, and other software offerings is the largest and fastest-growing growth engine for the whole cloud business. Spending on shared cloud services – Infrastructure as a Service (IaaS), System Infrastructure Software as a Service (SISaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) – will total $385 billion in 2021 and will grow at a compound annual growth rate (CAGR) of more than 21.0 percent through 2025, reaching $809 billion.
Dedicated (Private) Cloud Services, which comprises hosted private cloud services and the rapidly developing Dedicated Cloud Infrastructure-as-a-Service (DCIaaS), would expand at a quicker CAGR of 31.0 percent in 2021 albeit from a much smaller revenue base of $5 billion.
The as-a-Service cloud spending categories, including Shared Cloud as-a-Service and Dedicated Cloud as-a-Service, will account for most of the total cloud spending throughout the forecast, rising from 55.7 percent in 2021 to 64.1 percent in 2025. These segments will also have the fastest spending growth, with a five-year CAGR of 21.3 percent.
Outside of the as-a-Service sectors, cloud buildout — the hardware, software, and basic support services for these cloud assets – is the most crucial area of cloud spending. Throughout its prediction, IDC has already established that expenditure on computing and storage infrastructure products for cloud infrastructure will continue to surpass non-cloud IT infrastructure investments. The CAGR for cloud hardware, software, and support is predicted to be 11.8 percent over the next five years.
Cloud-related professional services and managed cloud services are the two remaining components of cloud spending not included in the as-a-Service total. Cloud-related professional services include various project-based services such as strategic planning, aid with the deployment or adoption of all types of cloud services, and other projects that require a cloud delivery capability as a basic component.
Managed cloud services provide management capabilities to ensure the continuous operation of cloud technologies and architectures, including both applications and infrastructure, as well as associated business processes and “embedded” professional services, 24 hours a day, seven days a week. Cloud-related professional services and managed cloud services will have comparable spending levels during the forecast, with managed cloud services seeing quicker spending growth.
The foundations driving the cloud market will continue to alter as the world transitions to a digital-first economy. The focus for cloud service providers (both shared and dedicated) will be on defining the types and size of resources offered, managing data transit, storage, and analysis, and developing strong developer, security, and subject matter ecosystems.
Developing and deploying specialized skills across varied contexts will become more crucial for cloud infrastructure providers than broadening the range of universal solutions. Furthermore, the administration of heterogeneous cloud services and data sets will present significant operational problems for IT businesses.
“With enterprises focusing more on ‘outcomes’ in their cloud selection processes, the long-term focus for all cloud providers will be on strengthening their relationships with business, not IT, from device, to edge, to network, to core,” Villars added.
The IDC report, Whole Cloud Forecast 2021-2025: The Path Ahead for Cloud in a Digital-First World (Doc #US47397521), identifies the variety of cloud-related (i.e., “whole cloud”) opportunities available for the 2021–2025 period, including, but encompassing, much more than the public cloud services market.