Cloud will hoover up UK software spending

Packaged software market to fall over next few years...

The cloud is forecast to account for 30 per cent of UK software spending by 2020, according to a report by analyst TechMarketView.

The UK cloud software market will grow by about two-thirds during 2011 and again in 2012, says the report. In comparison, the non-cloud software market is expected to decline slightly over the next few years.

Cloud computing is set to increase its share of the UK software market, according to TechMarketView Photo: Shutterstock

The report suggests that the rapid transition to cloud computing will be led by email software, business applications and collaboration software.

The report also advises software companies to change their strategies to accommodate the swift uptake of cloud computing if they have not done so already.

By 2014, the UK market in software as a service (SaaS) and platform as a service (PaaS) is expected to be worth about £1.8bn. While SaaS will make up approximately two-thirds of the UK cloud market, PaaS is expected to grow at a faster rate, increasing by 78 per cent in 2012 compared with a forecasted growth of 56 per cent for SaaS.

A separate report by analyst Gartner also predicts that PaaS will experience rapid growth in 2011.

These studies reinforce predictions that suggest 2011 will be a major year for cloud adoption, as cloud service providers convince enterprises that security risks can be managed.

Microsoft's Azure is perhaps the best-known PaaS software and has attracted major customers such as easyJet, Siemens and car maker Kia Motors.

HP, VMware, and Salesforce.com have all recently made announcements about cloud products.