Public cloud is big, and it’s growing fast. Nobody will deny that.
But Synergy Research Group’s latest estimate that IT corporations earned $20 billion in revenue thanks to the public cloud seems a little high. Is this fuzzy math or is the cloud really this big? It’s hard to say for sure. Check out the research yourself here.
+MORE AT NETWORK WORLD: Why is Marc Benioff backing away from the cloud? +
Synergy says the largest segment of the public cloud market is made up of hardware and software sales to build public clouds, which created $7 billion in revenue last quarter and is growing at 26% year-over-year.
That seems credible. After all, every day AWS adds as much new server capacity as Amazon used to support its $7 billion business back in 2004. A lot of money is being spent to build up public clouds.
Software as a service (SaaS) is the second largest portion of the cloud market, Synergy estimates, at $6.6 billion in quarterly revenues and a 29% yoy growth rate. Salesforce.com, one of the bigger SaaS vendors had revenue of $1.5 billion. Add in Microsoft’s Office 365 SaaS money and you could probably get to $6.6 billion. I’ll buy that one too.
Synergy says that Infrastructure as a Service (IaaS) vendors collected $5.5 billion in revenues last quarter, and it is the fastest growing of the cloud revenue streams at 49% yoy growth.
This figure may be a little high. Amazon Web Services is the largest of the IaaS vendors, and it had about $1.8 billion in sales last quarter. That would mean that all the other vendors in this market had to make $3.7 billion last quarter. I’m not buying that.
Co-location, or the renting of data center space to host public cloud services, is a $2.8 billion quarterly market, according to Synergy, growing 9% yoy. Again, this seems a little high.
By comparison, research firm IDC predicts that the entire worldwide cloud market will be $70 billion this year.
Overall, I think Synergy’s point is that the cloud market is substantial, and it’s growing. Their figures are likely in the ballpark, but I’m just not sure I agree with all of the specifics.