APAC public cloud revenues to hit $12B

By 2016, region's public cloud services will grow five-fold to rake in revenues totaling US$12 billion and account for 18.8 percent of global market, new report shows.
Written by Eileen Yu, Senior Contributing Editor

Public cloud services in the Asia-Pacific region are set to generate US$12 billion by 2016, growing five-fold over the next five years--the fastest among all regions amid rapid adoption in small and midsize business (SMB) segment, according to new projections unveiled Thursday by Ovum.

Market revenues will clock a compound annual growth rate of 34 percent from almost US$2.9 billion by end-2011, the research firm said. The region will also account for 18.8 percent of the global market by 2016, up from 16 percent this year.

The Europe, Middle East and Africa region will remain the second-largest market, after the United States, over the forecast period, increasing its share to 29 percent in 2016 from 27 percent in 2011.

"Asia-Pacific public cloud services market will grow at the fastest rate among all the regions, [where] growth will be driven by the rapid uptake in SMB segment as these enterprises continue to realize the strategic gains associated with the shift to cloud," said Saurabh Sharma, Ovum's senior analyst for market intelligence.

Favorable economic conditions and the fast-improving infrastructure environment will also serve drive the adoption of cloud services in the region, the report noted.

It added that Asia-Pacific, Australia, New Zealand, China and India will grow at faster rates, while Japan will remain the top contributor to the region's cloud services market.

Hyderbad, India-based Sharma said: "Recent moves by major cloud service providers to set up data centers in Asia-Pacific further underline the increasing strategic importance of the region in the global cloud services market."

According to Ovum, software-as-a-service (SaaS) will see its share of the market fall from 87 percent in 2011 to 62 percent in 2016. This contraction will be the result of rising demand for infrastructure-as-a-service and platform-as-service which will grow 9 percent and 5 percent, respectively, to 23 percent and 16 percent by 2016.

Laurent Lachal, the research firm's cloud computing senior analyst, noted that the market was growing at a fast pace and players such as Amazon and Google were seeing much progress, but demand for public clouds would not render IT departments obsolete. Rather, it would change their focus, he said.

"Shifts will include taking a more holistic approach to connecting networks, hardware and software," Lachal explained, adding that IT departments will also reduce their emphasis on maintenance and increase their innovation. They would also be encouraged to take more risks by giving employees the ability to tackle high-reward ventures, he said.

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