Gartner: Spending On Public Cloud Services Growing Rapidly

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Worldwide spending on cloud services will move on a steep growth trajectory in the coming years as businesses move more of their IT resources to the cloud, the technology research firm Gartner said.

Spending on enterprise public cloud services is expected to hit $109 billion in 2012, up from $91 billion in 2011. In 2016, cloud services spending will reach $207 billion, the research firm said.

The projected growth in cloud spending will occur as businesses expand the services they are willing to have hosted in the cloud, said Ed Anderson, Gartner research director, in an interview with CRN.

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Currently, the most popular cloud services involve business process outsourcing, but as companies grow more familiar with the cloud, they will move other parts of their data center resources to the cloud.

“Cloud computing is at the point where the technology has been demonstrated to be a reasonable approach to managing some IT resources,” Anderson said.

Business process outsourcing -- the contracting of operations of business functions or processes such as human resources, accounting or contact centers to third-party service providers such as Deloitte, Accenture, ADP and CSC -- accounts for the most spending on cloud services.

This market segment, termed by Gartner as Business Process-as-a-Service, will account for $84 billion in 2012, up from $72 billion in 2011, and is projected to reach $145 billion in 2016.

But spending on Software-as-a-Service (SaaS), Infrastructure-as-a-Service (IaaS), and Platform-as-a-Service (PaaS) is expected to continue to account for much growth going forward, he said.

Cloud services spending on SaaS has been fueled by cloud hosting of business applications such as Microsoft’s Office suite, Google Apps and’s CRM apps, he said. Spending on SaaS will reach $14 billion in 2012, up from $12 billion in 2011, and is projected to reach $27 billion in 2016.

NEXT: IaaS Market Projected For Fast Growth

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