Cloud Computing This Market Monitor overview report on the Cloud Computing marketplace reflects updated market and vendor estimates through CY Q3 2016. Here we examine the revenue generated by cloud service providers and technology vendors via cloud platforms IaaS and PaaS as well as IT management as a service (ITMaaS), online backup/recovery and cloud archiving. This report provides updated estimates and a five-year growth forecast for the cloud computing market, and includes vendor statistics and a breakdown of revenue by geographic region and vertical market. Our analysis is based on results from a bottom-up market-sizing analysis that incorporates revenue estimates and forecasts for 389 competing cloud vendors. Infrastructure Stand- Alone PaaS Cloud Computing Platform PaaS from SaaS Integration (ipaas) IT Management IT Service Management Systems and Network Monitoring & Management Infrastructure Software Resource Utilization, Capacity Planning and Billing Online Backup/ Recovery Cloud Archiving Greg Zwakman VP, Market and Competitive Intelligence Yulitza Peraza Associate Product Manager Quantitative Services William Fellows Research Vice President Carl Brooks Analyst Service Providers Agatha Poon Research Manager Global Cloud Computing Owen Rogers Research Director Digital Economics Jay Lyman Research Manager Cloud Management and Containers December 2016
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Table of Methodology Market Monitor s Bottom-Up Approach Cloud Computing Vendor Distribution Market Monitor Data Sources Vendor Funding Breakdown Market Monitor s Cloud Coverage Cloud Computing Sector 2015 Revenue Breakdown Overview: Cloud Computing & Cloud-Enabling Technologies Cloud : Geographic Revenue CET VS. Cloud Computing Cloud Computing : Vertical Revenue CET vs. Cloud Computing Relative Revenue Cloud Computing: New Market Entrants CET vs. Cloud Computing Cloud Computing : M&A Activity Cloud Computing Market Taxonomy Market Drivers(+)/Challenges(-) Cloud-Enabling Technologies Market Taxonomy VotE: IaaS Adoption and Importance Cloud Computing Overview VotE: Cloud Evolution Cloud Computing Market Highlights IaaS: Infrastructure Cloud Phase Adoption IaaS Definition Cloud Sector Highlights IaaS Market Highlights Cloud Computing Vendor Distribution (Public/Private Vendors) Cloud Computing & Sector Vendor Distribution IaaS Coverage: Vendors (5 slides) IaaS: Vendor by 2015E Revenue Range
Table of IaaS Vendor Distribution (Public/Private Vendors) Infrastructure Software IaaS Vendor Distribution (Revenue) Infrastructure SaaS Definition PaaS: Platform Infrastructure SaaS Market Highlights PaaS Definition Infrastructure SaaS Market Revenue Breakdown by Subsector PaaS Market Highlights Infrastructure SaaS Coverage: Vendors (4 slides) PaaS Market 2015E Revenue Breakdown by Subsector Infrastructure SaaS: Vendor by 2015E Revenue Range PaaS Coverage: Vendors (2 slides) Infrastructure SaaS Vendor Distribution (Public/Private Vendors) PaaS: Vendor by 2015E Revenue Range Infrastructure SaaS Vendor Distribution (Revenue) PaaS Vendor Distribution (Public/Private Vendors) Appendix: Public Cloud Criteria PaaS Vendor Distribution (Revenue)
Methodology Market Monitor s Bottom-Up Approach 389 Vendors included in analysis are estimated and forecasted individually Our cloud computing database contains individual models on 389 vendors in the market. Each model contains intelligence specific to that company (i.e., customers, pricing, deal sizes and trends) with a forecast that incorporates the unique traits, strengths and weaknesses of the vendor. 100% Of market estimate and forecast based on individual vendor estimates; no blackbox other category A bottom-up analysis entails creating individual estimates and forecasts for each market participant in lieu of relying on historical or related data, applying broad assumptions, or extrapolating market totals based on input from a handful of large vendors (a top-down approach). 9 out of 10 Vendors we have briefed directly to support our findings This analysis leverages our deep knowledge of and relationships within the cloud computing marketplace, resulting in a proprietary forecast of industry revenue based on a bottom-up analysis of each vendor s current revenue and growth expectations.
Market Monitor Data Sources 15,000 55+ 12 950+ CXO 6 Vendor briefings as a company annually Sector analysts support estimates Financial analysts contribute to MM Financial/banking clients provide insight Executive-level access across IT landscape End-user surveys performed annually
& Cloud-Enabling Technologies Cloud Computing
Overview: Cloud Computing & Cloud-Enabling Technologies 451 Market Monitor s coverage of the cloud market segments vendors/products according to the delivery/consumption models employed and the cloud functionality provided Cloud-Enabling Technologies (CET) sector includes the foundation and support software for a cloud environment. Cloud-Enabling Technologies CET offerings are leveraged by cloud providers to create the cloud environments they offer as a service and for the development and management of private clouds. The cloud computing market is defined by externally delivered services hosted by a third party. Cloud Computing Traits of cloud computing offerings we include in our analysis are rapid provisioning and self-service, scalability and elasticity, multi-tenant architectures, and dynamic pricing models. A full overview is available in the appendix.
CET VS. Cloud Computing Key Differentiators Between Cloud Computing and Cloud-Enabling Technologies Cloud Computing Cloud-Enabling Technologies Payment On-demand or subscriptionbased pricing Traditional license and maintenance revenue Delivery Model Externally delivered services hosted by a thirdparty outside firewall Software is installed and consumed on-premises, and is not hosted by a third party
CET vs. Cloud Computing Relative Revenue 2015 1.2x Size of the cloud-enabling technologies market relative to cloud computing 2016 1.0X Increased acceptance of the public cloud model and enterprise use cases leads to stronger growth in cloud computing vs. cloud-enabling technologies 2020 0.9X Cloud computing surpasses cloud-enabling technologies CC CET CC CET CC CET
CET vs. Cloud Computing ($Bn) 22% 15% CAGR expected for Cloud Computing CAGR expected for Cloud- Enabling Technologies 2015 2016 2017 2018 2019 2020 Cloud Computing '' $17.0 $22.2 $27.6 $33.4 $39.5 $46.0 Cloud Enabling Technologies $19.8 $23.2 $26.7 $30.6 $34.9 $39.6
Cloud Computing Market Taxonomy Cloud Computing Infrastructure Platform Infrastructure Software Stand- Alone PaaS PaaS from SaaS Integration (ipaas) IT Management Online Backup/ Recovery Cloud Archiving IT Service Management Systems and Network Monitoring & Management Resource Utilization, Capacity Planning and Billing Cloud Computing is defined by externally delivered services specifically, third-party, hosted, pay-as-you-go services. We believe the cloud is, at its very essence, a service delivery and consumption model. Thus, we have defined cloud computing not by the technologies that enable it but, instead, by the method of delivery and consumption.
Cloud-Enabling Technologies Market Taxonomy Cloud-Enabling Technologies Virtualization Automation & Management Server Data & Application Protection Management Platforms Brokers Cloud-Enabling Technologies (CET) encompass the vital support system for a cloud environment, which includes the automation and management stack. It is our position that server virtualization itself is an enabler for cloud computing. In addition, what the broader industry terms private clouds fall under the purview of our CET definition because this technology is installed, delivered and consumed on-premises and is not hosted by a third party. However, the CET tools included in our analysis are commonly leveraged by cloud providers to create the cloud environments they offer as a service.
Appendix: Public Cloud Criteria Our Definition of a Cloud Service: With the cloud concept firmly embedded in the marketing lingo across the technology landscape, we constantly witness cloudwashing the practice of including many legacy products and services under a company s cloud umbrella. To enable us to sift through the marketing noise and gather data on true cloud offerings, we examine each product or service using eight primary attributes that together constitute and define a cloud service. These attributes should not be evaluated in isolation since each builds on the one before it; and there are clear dependencies, with certain cloud properties being difficult to architect without the appropriate supporting attributes. Only when the full stack is satisfied will an offering be included in our cloud computing analysis. These criteria are designed primarily as a yardstick for examining and evaluating various types of cloud offerings. Through proper use of the attributes, one can determine just how cloudy an ostensible cloud computing or storage offering is, and if that offering in fact qualifies as a cloud service using objective metrics. The eight attributes we use to determine what is and what isn t a cloud offering for this analysis are listed here. A more detailed discussion of each of these criteria is provided in 451 Research s free Cloud Codex report, which is available for download at https://451research.com.
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