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STAMFORD, Conn. November 13, 2019

Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17% in 2020

IaaS Secures Highest Growth in 2020 Due to Data Center Consolidation

The worldwide public cloud services market is forecast to grow 17% in 2020 to total $266.4 billion, up from $227.8 billion in 2019, according to Gartner, Inc.

“At this point, cloud adoption is mainstream,” said Sid Nag, research vice president at Gartner. “The expectations of the outcomes associated with cloud investments therefore are also higher. Adoption of next-generation solutions are almost always ‘cloud-enhanced’ solutions, meaning they build on the strengths of a cloud platform to deliver digital business capabilities.”

Software as a service (SaaS) will remain the largest market segment, which is forecast to grow to $116 billion next year due to the scalability of subscription-based software (see Table 1). The second-largest market segment is cloud system infrastructure services, or infrastructure as a service (IaaS), which will reach $50 billion in 2020. IaaS is forecast to grow 24% year over year, which is the highest growth rate across all market segments. This growth is attributed to the demands of modern applications and workloads, which require infrastructure that traditional data centers cannot meet.

Table 1. Worldwide Public Cloud Service Revenue Forecast (Billions of U.S. Dollars)

 

2018

2019

2020

2021

2022

Cloud Business Process Services (BPaaS)

41.7

43.7

46.9

50.2

53.8

Cloud Application Infrastructure Services (PaaS)

26.4

32.2

39.7

48.3

58.0

Cloud Application Services (SaaS)

85.7

99.5

116.0

133.0

151.1

Cloud Management and Security Services

10.5

12.0

13.8

15.7

17.6

Cloud System Infrastructure Services (IaaS)

32.4

40.3

50.0

61.3

74.1

Total Market

196.7

227.8

266.4

308.5

354.6

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service
Note: Totals may not add up due to rounding.

Source: Gartner (November 2019)

Various forms of cloud computing are among the top three areas where most global CIOs will increase their investment next year, according to Gartner. As organizations increase their reliance on cloud technologies, IT teams are rushing to embrace cloud-built applications and relocate existing digital assets. “Building, implementing and maturing cloud strategies will continue to be a top priority for years to come,” said Mr. Nag.

“The cloud managed service landscape is becoming increasingly sophisticated and competitive. In fact, by 2022, up to 60% of organizations will use an external service provider’s cloud managed service offering, which is double the percentage of organizations from 2018,” said Mr. Nag. “Cloud-native capabilities, application services, multicloud and hybrid cloud comprise a diverse cloud ecosystem that will be important differentiators for technology product managers. Demand for strategic cloud service outcomes signals an organizational shift toward digital business outcomes.”

Gartner clients can read more in the report “Forecast: Public Cloud Services, Worldwide, 2017-2023, 3Q19 Update.”

Gartner IT Infrastructure, Operations & Cloud Strategies Conference

Gartner analysts will provide additional analysis on cloud strategies and infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies events taking place November 25-26 in London and December 9-12 in Las Vegas. Follow news and updates from these events on Twitter using #GartnerIO.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

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