Gartner: Cloud to grow 20% this year to $109B market

BPaaS, SaaS and IaaS dominate market today; cloud is still only 3% of total IT spending

The cloud computing market will grow almost 20% this year to become a $109 billion industry, research firm Gartner predicts, with business process as a service (BPaaS) and software as a service (SaaS) dominating the market, but infrastructure as a service (IaaS) quickly gaining momentum.

In 2011, the market stood at $91.4 billion and the research firm expects it to grow to $206.6 billion by 2016. Cloud is still only a very small part of the overall IT spending market though. In July, Gartner predicted total IT spending would be $3.6 trillion in 2012.

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BPaaS currently represents the largest share of the cloud market, making up more than three-quarters of the spending in the cloud. This refers to business processes delivered from the cloud, including email, payroll and cloud advertising -- which is the largest single chunk of cloud spending in the market right now, representing $84.2 billion in spending. Cloud advertising is expected to continue to make up almost half of spending in the cloud market through the next four years, Gartner predicts.

The next largest market is SaaS, which Gartner expects to finish of the year as a $14.4 billion market, following by IaaS, which is slated to be a $6.2 billion market. Platform as a service (PaaS) is the smallest of the three major cloud models, representing about $1.2 billion in spending. Another significant and growing area of the cloud market is around cloud management and security services, which Gartner says will be a $3.3 billion industry this year. During the next four years, Gartner expects the IaaS market to grow at a faster pace than the SaaS market and for the two to be of about the same size by 2016.

Network World staff writer Brandon Butler covers cloud computing and social collaboration. He can be reached at BButler@nww.com and found on Twitter at @BButlerNWW.

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