Cloud and SaaS global revenue to pass $200bn milestone in 2020

Global revenue from cloud and software-as-a-service (SaaS) services will grow 23-29% CAGR over the next five years, forecasts new data from Synergy Research Group.

“As cloud markets reach a massive scale, growth rates will inevitably tail off, but our latest forecasts are still showing that over the next five years we will still see some really robust growth,” said John Dinsdale, a chief analyst and research director at Synergy Research Group.

This prediction means that these sectors will pass the $200 billion milestone in 2020, which in turn will create an approximate 11% annual growth rate in the sales of infrastructure to hyper scale cloud providers.

Conversely sales of hardware and software to data centres will decline further, reflecting the shift from privately-owned infrastructure to the public cloud. 

Broken into categories public infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will see the most growth at 29%, managed or hosted private cloud service revenues will increase by 26% and enterprise SaaS by 23%.

Across all major cloud service segments strong growth is expected to continue. Some of the biggest growth being seen in database and IoT-based Iaas/PaaS services and enterprise resource planning within SaaS. Geographically APAC is set to become the highest growth region, followed by EMEA and North America. 

The data also revealed that the 24 hyperscale companies now have a global footprint comprising of over 360 large data centres, growing at a rate of almost 20% per year and dominating the cloud market. According to the report, these companies will soon account for over 80% of all cloud and SaaS service revenues and almost 40% of spend on all public and private data centre equipment.

“As cloud continues to dramatically reshape the IT world it is also clear that the hyperscale phenomenon continues to dramatically reshape cloud. Hyperscale operators are diminishing the growth opportunity for traditional non-hyperscale service providers and are also seriously challenging the technology vendor community to rethink its position in the new world,” added Dinsdale.

Last month, Synergy Research Group published its findings on colocation market leadersmetros with the highest revenue growth, cloud infrastructure and the cloud services market.