Analysts: Cloud essential for major vendors' growth

IDC says vendor failure in cloud will lead to stagnation, while Gartner predicts 18.5 per cent public cloud spending boom in 2013

Not even the largest technology firms can continue to sustain market leadership without investing strongly in the cloud, according to a new report from IDC.

The analyst claimed in its Worldwide Hosted Private Cloud (HPC) Services 2012-2016 Forecast report that vendors have to invest heavily in cloud services now in order to remain in a competitive position in the future.

IDC went on to predict that by the end of 2016 HPC services will be worth more than $24bn (£16bn) annually worldwide, with a compound annual growth rate of more than 50 per cent between 2012 and 2016.

IDC defines HPC as a combination of both dedicated and virtual private cloud.

The high growth rate of HPC services is down to an increased demand for IT firms to provide more efficient and scalable solutions, according to IDC. It added that software providers, global systems integrators and professional services firms and telecoms providers are set to be the main beneficiaries of the growth.

Robert Mahowald, research vice president for SaaS and cloud services, said investment in cloud across the board is essential for tech firms.

"Not even the largest technology incumbents can sustain IT market leadership without achieving leadership in cloud services," he added.

"Quite simply, vendor failure in cloud services will mean stagnation. Vendors need to be doing everything they can – today – to develop a full range of competitive cloud offerings and operating models optimised around those offerings."

IDC's forecast comes as Gartner predicts that by 2016, spending on global public cloud services will total $677bn.

By the end of 2013, the analyst reckons the public cloud services market will have grown year on year by 18.5 per cent to $131bn.

Despite the overall expected growth, Gartner warns that emerging markets in the Asia-Pacific, Latin America, eastern Europe and Middle East and north Africa regions will reap the most benefits as more mature markets are set for slower growth rates.

Ed Anderson, research director at Gartner, said: "Although forecasted growth is generally high across all regions, the adoption of cloud services varies significantly by country.

"Providers should not assume that a generic strategy applied to specific countries or regions of the world will produce the same outcome when applied to other countries, even countries with similar market characteristics."