SME take up boosts public cloud services use

Peter Dinham
Thursday, 29 September 2011 13:04

A five-fold increase over the next five years in the public cloud services market is predicted for the Asia-Pacific region - the fastest rate amongst all regions - with the growth driven by the rapid uptake of cloud services by small to medium enterprises.

Australia and New Zealand will experience faster growth in public cloud services uptake than other countries in the AP region, other than China and India.

According to its latest survey of the AP public cloud market, analysts' Ovum, says that as SMEs continue to realise the strategic gains associated with the shift to cloud, it expects the five-fold increase in revenues to take totals sales to US$12billion in 2016.

In its new forecast, Ovum says the AP public cloud market will see compound annual growth rate (CAGR) of 34 per cent from the US$2.89 billion it will reach at the end of 2011, with the region increasing its share from 16 per cent in 2011, to 18.8 per cent in 2016.

Ovum's senior analyst for market intelligence, Saurabh Sharma, says that the AP public cloud services market will grow at the fastest rate amongst all the regions, and that growth will be driven by the 'rapid uptake in SME segment as these enterprises continue to realize the strategic gains associated with the shift to cloud.'

'Increasingly favourable economic conditions and the fast improving infrastructure environment will serve as a major enabler for uptake of cloud services in this region,' Sharma said.

'In AP, Australia, New Zealand, China and India will grow at faster rates while Japan remains the top contributor to regional cloud services market. Recent moves by the major cloud service providers to set up data centers in AP further underline the increasing strategic importance of the region in the global cloud services market.'

Meanwhile, globally Ovum says that Europe, the Middle East and Africa will remain the second-largest market over the forecast period, with the region's share increasing from 27 per cent in 2011 to 29 per cent in 2016.

Ovum forecasts that Western Europe will grow at a CAGR of 31.2 per cent from 2011 to 2016 to reach $17.2 billion, up from $4.4 billion in 2011; Eastern Europe will grow at a CAGR of 30.7 per cent from 2011 to 2016 to reach $1.5 billion, up from $396 million in 2011, and that the Middle East and Africa will increase at a CAGR of 31.7 per cent from 2011 to 2016, rising from $114 million to $451 million.

On cloud computing service lines globally, Ovum forecasts that SaaS will shrink from 87 per cent of the market in 2011, to 62 per cent in 2016, due to the rise of IaaS and PaaS, which will grow from nine per cent and five per cent respectively to 23 per cent and 16 per cent.

According to Ovum's cloud computing senior analyst, Laurent Lachal, while the market is growing at a fast pace and players such as Amazon and Google are making much progress, the 'impact of public clouds will not be to render IT departments obsolete, but rather to shift their focus.'

Lachal says that market shifts will include taking a 'more holistic approach to connecting networks, hardware and software.'

'IT departments will also reduce their emphasis on maintenance and increase their innovation, while being encouraged to take more risks, by giving employees the capacity to tackle high-reward ventures.

'But as ever, preparation is the key to ensuring that cloud computing delivers a positive outcome,' Lachal concludes.