Gartner Says Public Cloud Services Market to Reach $204Bn in 2016

The worldwide public cloud services market is projected to grow 16.5 percent in 2016 to total $204 billion, up from $175 billion in 2015, according to Gartner, Inc.

The highest growth will come from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 38.4 percent in 2016. Cloud advertising, the largest segment of the global cloud services market, is expected to grow 13.6 percent in 2016 to reach $90.3 billion.

"The market for public cloud services is continuing to demonstrate high rates of growth across all markets and Gartner expects this to continue through 2017," said Sid Nag, research director at Gartner. "This strong growth continues reflect a shift away from legacy IT services to cloud-based services, due to increased trend of organizations pursuing a digital business strategy."

The IaaS segment will remain the fastest-growing segment in 2016, forecast to reach 22.4 billion.

"IaaS continues to be the strongest-growing segment as enterprises move away from data center build-outs and move their infrastructure needs to the public cloud," said Mr. Nag. "Certain market leaders have built a significant lead in this segment, so providers should focus on creating differentiation for success."

Cloud application services (SaaS) is forecast to grow 20.3 percent in 2016, to $37.7 billion. As software vendors shift their business models from on-premises licensed software to public cloud-based offerings, this trend will continue.

In addition, the entry of some major software vendors into the public cloud last year will fuel growth of the SaaS market moving forward.