In the cloud, services top hardware, software for the first time

Dive Brief:

  • Spending on cloud services overtook spend on cloud infrastructure hardware and software for the first time in 2016, according to new data from Synergy Research Group.

  • Operator and vendor revenues across six key cloud services and infrastructure market segments for the four quarters ending September 2016 reached $148 billion — a growth of 25% annually, according to the research.

  • IaaS and PaaS services grew the most (53%) followed by hosted private cloud infrastructure services (35%) and enterprise SaaS (34%). Collectively, Synergy said cloud service markets are now growing three times faster than cloud infrastructure hardware and software.

Dive Insight:

There appears to be no end in sight for cloud growth. When it comes to spending on hardware and software to build cloud infrastructure, Synergy found spend on public cloud is now growing more rapidly than spend on private cloud.

Synergy Research Group

"Major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side," said Jeremy Duke, founder and chief analyst of Synergy Research Group, in a press release. "Cloud technologies are now generating massive revenues for technology vendors and cloud service providers and yet there are still many years of strong growth ahead."

Amazon Web Services and Microsoft led the way in IaaS and Paas, while Cisco and Hewlett Packard Enterprise were number one in public cloud. IBM and Rackspace were the top providers in hosted private cloud last year.

Filed Under: Cloud Computing