Gartner Says Public Cloud Revenue to Exceed $200 Billion in 2019

Written by David Marshall

In its latest forecast for the worldwide public cloud services market, analyst firm Gartner said it expects revenue to continue to grow by 17.3%, topping $206 billion next year.  That’s up from $175.8 billion in 2018. 

The analyst firm points out that the fastest-growing segment of the market is cloud system infrastructure services (Infrastructure-as-a-service or IaaS), which includes the bulk of the public cloud services offered by companies such as Amazon Web Services Inc., adding that it will remain the fastest-growing individual segment in the market, growing by 27.6% in 2019 to reach $39.5 billion, up from $31 billion in 2018.

Moreover, Gartner said it expects that by 2022, 90% of organizations purchasing public cloud IaaS will do so from a company that integrates these offerings with platform-as-a-service products, using both capabilities from the same provider.

"Demand for integrated IaaS and PaaS offerings is driving the next wave of cloud infrastructure adoption," says Sid Nag, research director at Gartner.  "We expect that IaaS-only cloud providers will continue to exist in the future, but only as niche players, as organizations will demand offerings with more breadth and depth for their hybrid environments.  Already, strategic initiatives such as digital transformation projects resulting in the adoption of multi-cloud and hybrid cloud fuel the growth of the IaaS market."

Meanwhile, Gartner says Software-as-a-service (SaaS) remains the largest segment of the cloud market, and revenue there is expected to grow by 17.8%, to reach $85.1 billion by 2019.  

"The increasing adoption of SaaS applications and other cloud services impacts the management, dissemination and exploitation of organization content," says Craig Roth, research vice-president at Gartner.  "Organizations are steadily, but not exclusively, shifting their content environments to SaaS. Gartner expects that by 2019, the current enterprise content management market will devolve into purpose-built, cloud-based content solutions and solution services applications."

In the business process as a service category, Gartner forecasts revenue growth of 7.9%, to reach $50.3 billion in 2019.  Gartner also found that buyers increasingly expect deep domain expertise, technology and global deployment capabilities from their providers, as well as service portfolios that bridge legacy offerings and support new automated, digital and cloud service delivery paradigms.