Synergy Research’s latest data could be too good to be true
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.
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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.
