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Cloud services sales to hit $260bn this year, says Gartner

Global sales of cloud services expected to increase by 18.5% in 2017, with big rises in IaaS and SaaS revenue

IT buyers worldwide are expected to spend $260bn on cloud services in 2017, with infrastructure as a service (IaaS) seeing the biggest growth, according to research.

Gartner has predicted an 18.5% increase in cloud sales compared with 2016, when suppliers generated $219.6bn.

IaaS is expected to grow by 36.6% to reach $34.7bn for the year, while software as a service (SaaS) is predicted to grow by 21% from $48.2bn last year to $58.6bn in 2017.

“Final data for 2016 shows that SaaS revenue was far greater in 2016 than expected,” said Gartner research director Sid Nag. “SaaS is also growing faster in 2017 than was previously forecast, leading to a significant uplift in the entire public cloud revenue forecast.”

Gartner is forecasting that cloud services revenue will reach $305.8bn next year – up 17.5% on this year – but it expects the rate of growth to stabilise after that as the market matures.

SaaS and IaaS are both predicted to continue their rise in 2018, however. SaaS sales are expected to increase by 21.5% to $71.2bn, and those for IaaS to jump by 31.9% to $45.8bn.  

Nag also said the leading players would maintain their hold on the sector. “In the IaaS segment, Amazon, Microsoft and Alibaba have already taken strong positions in the market,” he said.

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“In the SaaS and PaaS [platform as a service] segments, we are seeing cloud’s impact driving major software suppliers such as Oracle, SAP and Microsoft from on-premise, licence-based software to cloud subscription models.”

Last month, Gartner released market share figures for cloud services suppliers. Despite Amazon Web Services (AWS) having the biggest share at 44.2%, it recorded the lowest growth out of the top four providers in 2016, which also included Microsoft, Alibaba and Google. Chinese cloud supplier Alibaba recorded growth of 126.5% and Google 100%, suggesting that AWS’s market lead may be narrowing.

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