"Public cloud services are increasingly being seen as an enabler of business agility and speed," said Deepak Mohan, research director, Public Cloud Storage and Infrastructure at IDC. "This is bringing about a shift in IT infrastructure spending, with implications for the incumbent leaders in enterprise infrastructure technologies. Growth of public cloud IaaS has also created new service opportunities around adoption and usage of public cloud resources. With changes at the infrastructure, architectural, and operational layers, public cloud IaaS is slowly transforming the enterprise IT value chain."
The public cloud IaaS market grew 51% in 2015. IDC expects this high growth to continue through 2016 and 2017 with a CAGR of more than 41%. The growth rate is expected to slow after 2017 as enterprises shift from cloud exploration to cloud optimization. In addition, alternatives such as managed private cloud will grow in maturity and availability, providing IT organizations more options as they plan their infrastructure transformation.
For many enterprises, a hybrid infrastructure mixing existing IT infrastructure with cloud infrastructure represents the optimal path to public cloud IaaS adoption. In fact, hybrid cloud infrastructure is already a common pattern at several large enterprises and IDC predicts that 80% of IT organizations will be committed to hybrid architectures by 2018.
From a worldwide perspective, a number of regional public cloud services have emerged in the last two years. A majority of these are based on OpenStack, which has lowered the barrier for creation and set up of new cloud services. IDC expects to see continued growth in regional public cloud service providers, driven by regulatory and data sovereignty concerns, and increasing demand for local alternatives to the global public cloud service providers.
The public cloud IaaS market is currently dominated by a few large service providers, led by Amazon, followed by a long tail of much smaller service providers. In 2015, 56% of the revenue and 59% of the absolute growth went to the top 10 IaaS vendors. The dominance of the leading providers is expected to continue throughout the forecast period, as economies of scale and continued investment drive the cycle of adoption and growth.
