Cloud- Related Spending by Businesses to Triple from 2011 to 2017
El Segundo, Calif. (Feb. 11, 2014)—An increasing move on the part of enterprise
businesses to move their information technology services, applications and
infrastructure to a cloud-based architecture will cause market revenue in this segment to
surge by a factor of three from 2011 to 2017, according to IHS Technology (NYSE:
Global business spending for infrastructure and services related to the cloud will reach
an estimated $174.2 billion this year, up a hefty 20 percent from $145.2 billion in 2013.
And in a sign of the market’s vigor, spending will enjoy continued strong growth during
the next few years as enterprises everywhere race to come up with their own cloudstorage solutions. By 2017, enterprise spending on the cloud will amount to a projected
$235.1 billion, triple the $78.2 billion in 2011, as shown in the attached figure.
“With the cloud touching nearly every consumer and enterprise around the globe,
spending for cloud-related storage, servers, applications and content will be dedicated
toward building a framework that is rapidly scalable, highly dynamic, available ondemand and requiring minimal management,” said Jagdish Rebello, Ph.D., senior
director and principal analyst for the cloud and big data at IHS. “The robust growth will
come as an increasing number of large and small enterprises move more of their
applications to the cloud, while also looking at data analytics to drive new insights into
Spending on cloud services, applications, security and data analytics will account for an
ever- growing portion of total information-technology expenditures undertaken by
enterprises, valued today at approximately $2 trillion, Rebello noted. And the most
engaged among spenders will be those seeking to ensure their continued relevance to
consumers in the future.
These findings can be found in the report, “The Cloud: Redefining the Information,
Communication and Technology Industry,” from the Mobile & Wireless Communications
service of IHS.
Why the cloud?
The cloud is becoming a critical cornerstone in the strategies of those wishing to offer
online storage, computing, analytics and provisioning services. This is because the vast
amounts of media now being consumed on mobile devices like smartphones, tablets
and computers require larger storage solutions, which now the cloud can provide. Such
developments, in turn, will drive multibillion-dollar investments in cloud-based
architectures, Rebello said. .
Already, small and giant companies alike are pushing to provide consumers and
enterprise users with their own public or private cloud storage services. Some—like
Google, Apple, Amazon and Microsoft—are offering public cloud storage to drive
adoption of the individual companies’ hardware and content. Others, like Barracuda,
Dropbox and Carbonite, are adopting the so-called Freemium model—in which premium
storage services are available on top of a fixed amount of free storage—in order to
compete with the giants.
The fight for dominance is understandably fierce, Rebello noted. The number of global
consumer subscriptions to the cloud will jump to 730 million this year, up from 630
million in 2013, representing a potentially vast base of users to which cloud suppliers
can market their products and other non-cloud services.
Amazon, for instance, offers an inexhaustible range of products, and transforming even
a casual user of the online giant’s cloud services could well bring in an endless stream
of future revenue as the user becomes a loyal and permanent client.
The future power brokers yet to be determined
Among the various stakeholders involved in offering cloud infrastructure and services,
wireless providers are exceptionally well-situated to offer online cloud storage in order
to boost value to their customers.
With the cloud, wireless providers can help reduce churn, a periodic problem as
customers defect to other operators. Providers can also use the cloud to seek out
demographic information to help them come up with tailor-made offerings for existing
clientele. By using big data and sophisticated data-analytic tools, wireless providers
could offer truly differentiated services to subscribers, Rebello pointed out.
To date, however, wireless operators have lagged behind in cloud offerings, compared
to other stakeholders like Google and Amazon. As a result, the operators are missing
out on cloud-related revenue, which is going instead to rival factions of the mobile value
A new cloud paradigm will dictate new ways to manage data. Issues of security and
compliance must be addressed, and cloud services need to be able to manage content
in an organized fashion. Moreover, issues of data loss, unauthorized access and mining
for marketing purposes require deft handling.
All told, cloud services must strike the correct balance between providing convenience
to users, while at the same time respecting their privacy, IHS believes.
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