IDC: Cloud will be $107B industry by 2017

As the 'Internet of Things' takes off, it will be hosted in the cloud

Cloud computing was an estimated $47.4 billion industry in 2013 and is expected to more than double to $107 billion by 2017, research firm IDC predicts.

The cloud’s 23.5% compound annual growth rate is five times faster than that of the broader technology market, IDC Vice President of data center and cloud Rick Villars said during the IDC Directions conference on Wednesday in Boston.

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Cloud’s adoption has been driven by three major factors: scale, complexity and speed, Villars said. The cloud offers scale that regular businesses do not have, which allows them to deliver more complex services faster.

The explosion of mobile devices was one of the first megatrends that significantly ramped up the need for cloud computing services.

“For every mobile device that’s launched, there has to be a large data center behind it to enable it,” he said. This led to a wave of “mega data centers” being built by the likes of Google, Verizon and others.

The next wave of the mobile revolution is creeping up on us, Villars said and it’s exemplified by wearable technology, connected devices and the Internet of Things (IoT). Wearable devices will only increase the need for more data centers to serve content delivered to these devices. “The future of the cloud is about the Internet of Things,” Villars said. “[The cloud] is the foundation on which the IoT gets delivered. You have to have the data center and the cloud before you can deliver the services.”

As more connected devices proliferate, there will also be a need to have those data centers closer to those end devices. This, Villars and IDC predicts, will lead to a new breed of “micro data centers.” These will be highly modularized data centers built with like Lego-like components, giving their owners the ability to quickly add capacity as needed.

But what does this all mean for end users and CIOs of businesses? Villars said end users will have an opportunity to benefit from the continued maturity of the cloud industry as well. He recommends that users take an “asset management” approach evaluating cloud services. Businesses will have what he calls either liquid or fixed IT assets. Fixed ones are regulated data, or legacy mission critical applications that will likely never be outsourced to a cloud environment. Liquid assets are ones that can be outsourced to a cloud provider to take advantage of a service provider’s scale and infrastructure. “For CIOs, it’s time to evaluate what parts of my system are fixed and which parts you are able to get on demand,” he said. The fewer IT resources a business has to run itself, the more efficient it will become and the larger the cloud computing industry will grow.

Senior Writer Brandon Butler covers cloud computing for Network World and He can be reached at and found on Twitter at @BButlerNWW. Read his Cloud Chronicles here.  


Copyright © 2014 IDG Communications, Inc.

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