IDC expects maturing cloud services to generate $100 billion in revenue in 2016

A recently released IDC report is enthusiastic about the growth of public cloud services, predicting $40 billion in spending in 2012 that will grow to $100 billion annually by 2016. Their expectation over this five year time period is that annual compound growth rate of the public IT cloud business will be five times greater than the growth of the IT industry, signifying a weather change to the acceptance of public cloud IT services across the board.

The IDC report appears to indicate that they believe that the current growth in cloud services is primarily that of businesses evaluating and moving existing applications and internally supported services to the cloud, and that the major growth will be seen as companies begin to look to cloud services to drive innovative new offerings and innovations that will expand business opportunity.

IDC defines five key areas of growth for cloud services and expects these services to provide more than 40% of the overall industry growth with these key technologies; basic storage, servicers, applications, systems infrastructure, and Platform as a Service (PaaS). This prediction for PaaS is the most tenuous of those offered as the growth of this service has not been as strong as analysts previously expected, with a significant amount of customer concern over turning this much control over to a public service.

There is also an expectation that the SMB market will significantly expand its use of public cloud services, with the expectation that vendors will be able to use this market segment as the bridge to move their revenues from the traditional financial models to one that uses services as a significant percentage.

This report focus on the growth of public clouds exclusively and not on the growth potential for private cloud services vendors. There is a presumption that as public cloud IT services mature, that they will eat into the market for private clouds as potential customer concerns about reliability, availability, and security are addressed by public cloud providers.