SaaS leads cloud services market growth in 2017

According to the ​latest data from IDC, the public cloud services market grew 28.6 percent in the first half of 2017.
Written by Natalie Gagliordi, Contributor
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The cloud services market is evolving as more IT services are being offered "as a service" via the internet, but the three traditional pillars of cloud computing -- Software as a Service, Platform as a Service and Infrastructure as a Service -- have shown steady growth so far this year.

According to the latest data from research firm IDC, the public cloud services market grew 28.6 percent in the first half of 2017, with revenues totaling $63.2 billion. However, the growth was unevenly spread across SaaS, PaaS and IaaS.

There are now thousands of SaaS applications, available from internet giants to startups. The SaaS segment holds nearly 69 percent of overall public cloud market share, but it's year-over-year growth rate of 22.9 percent is the slowest of the three primary segments.

"Many companies have picked the low-hanging fruit, in terms of apps that could be easily moved to the cloud, and are now evaluating the migration of their next set of larger strategic systems (i.e. ERP, supply chain applications, etc.) to a SaaS model," said IDC analyst SaaS program VP Eric Newmark. "These projects, coupled with companies' efforts to embrace digital transformation, will continue to fuel strong SaaS growth."

Conversely, the PaaS segment hold the least market share (13.6 percent) but delivers strongest growth rate at 50.2 percent year over year. IDC says growth in the PaaS market is fueled by rapid adoption of container technology.

"All vendors are modifying their solutions to bring automation into the entire application lifecycle, and developers are rewarding such vendors with higher than average gains," said Larry Carvalho, research manager for PaaS at IDC.

The IaaS segment -- which is dominated by Amazon Web Services in terms of providers -- counts for 17.8 percent of the public cloud services market and has a year-over-year growth of 38.1 percent. IDC says growth in IaaS is bolstered by the overall granularity of IaaS offerings, and a surge in the number of value-added services available.

"Recent introductions into the market, like Azure Stack and VMware Cloud on AWS, also enable easier hybrid IT models and reduce the barrier to cloud adoption for enterprises," said Deepak Mohan, research director for IaaS at IDC. "Cumulatively, these are paving the way for the next wave of enterprise application deployments on public cloud IaaS."



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