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Public cloud revenue grows 28% for first half of 2017, research finds

Revenue from public cloud services grew by 28% for the first half of this year, compared with the same period in 2016, says IDC

Global public cloud revenue grew by 28.6% year-on-year for the first half of 2017, according to researcher IDC.

The group’s Worldwide Semi-annual Public Cloud Services Tracker revealed that sales reached $63.3bn, compared with last year’s $49.2bn.

Frank Gens, senior vice-president and chief analyst at IDC, said the figure highlights the urgency from companies to move to the cloud.

“Public cloud adoption is accelerating in large part as enterprises recognise that the cloud has become the launchpad for virtually every new IT innovation in the past 24 months – including AI [artificial intelligence], blockchain, quantum computing and more. Organisations not on the public cloud will be increasingly isolated from the world of tech innovation,” he said. 

Software as a service (SaaS) retained most of the market, but decreased from 2016’s 71.8% to 68.7%. It gained $43.4bn in revenue, whereas infrastructure as a service (IaaS) and platform as a service (PaaS) earned $11.2bn and $8.6bn respectively.

In the UK, total revenue grew 12.8%, from $2.6bn in the first six months of 2016 to $2.9bn in the same period of 2017. SaaS made up more of the market (70.1%) than the global average, and earned $2.1bn sales.

Eric Newmark, programme vice-president for IDC’s SaaS enterprise applications and industry cloud research practices, said organisations now have a “cloud first” mentality and are considering moving larger systems to the SaaS infrastructure.

“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 such as ERP [enterprise resource planning], supply chain applications, and so on, to a SaaS model,” he said.

“These projects, coupled with companies’ efforts to embrace digital transformation, will continue to fuel strong SaaS growth,” he added.

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In the UK, IaaS made up a similar proportion of sales as the global average (17.8%) and earned revenue of $532.7m. Deepak Mohan, IDC’s research director for IaaS, said increased interest from companies and the continuous funding by cloud providers is driving the platform forward.

“Recent introductions into the market, like Azure Stack and VMware Cloud on Amazon Web Services, also enable easier hybrid IT models and reduce the barrier to cloud adoption for enterprises. Cumulatively, these are paving the way for the next wave of enterprise application deployments on public cloud IaaS,” he said.

PaaS had a larger share of the market in the UK (12.1%) than the global average and gained revenue of $363.5m.  .... ..... .... .... .... .... .... ..... .... .... .... ....

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