Gartner Forecasts Worldwide Public Cloud Revenue to Grow 17.5 Percent in 2019

• Gartner Projects Cloud Services Industry to Grow Exponentially Through 2022

• The worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total $214.3 billion, up from $182.4 billion in 2018, according to Gartner, Inc.

The fastest-growing market segment will be cloud system infrastructure services, or infrastructure as a service (IaaS), which is forecast to grow 27.5 percent in 2019 to reach $38.9 billion, up from $30.5 billion in 2018 (see Table 1). The second-highest growth rate of 21.8 percent will be achieved by cloud application infrastructure services, or platform as a service (PaaS).

“Cloud services are definitely shaking up the industry,” said Sid Nag, research vice president at Gartner. “At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organizations. What we see now is only the beginning, though. Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three time the growth of overall IT services.”

Worldwide Public Cloud Service Revenue Forecast (Billions of U.S. Dollars)

  2018 2019 2020 2021 2022
Cloud Business Process Services (BPaaS) 45.8 49.3 53.1 57.0 61.1
Cloud Application Infrastructure Services (PaaS) 15.6 19.0 23.0 27.5 31.8
Cloud Application Services (SaaS) 80.0 94.8 110.5 126.7 143.7
Cloud Management and Security Services 10.5 12.2 14.1 16.0 17.9
Cloud System Infrastructure Services (IaaS) 30.5 38.9 49.1 61.9 76.6
Total Market 182.4 214.3 249.8 289.1 331.2

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service

Note: Totals may not add up due to rounding.

Source: Gartner (April 2019)

According to recent Gartner surveys, more than a third of organizations see cloud investments as a top three investing priority, which is impacting market offerings. Gartner expects that by the end of 2019, more than 30 percent of technology providers’ new software investments will shift from cloud-first to cloud-only. This means that license-based software consumption will further plummet, while SaaS and subscription-based cloud consumption models continue their rise.

“Organizations need cloud-related services to get onboarded onto public clouds and to transform their operations as they adopt public cloud services,” said Mr. Nag. Currently almost 19 percent of cloud budgets are spent on cloud-related services, such as cloud consulting, implementation, migration and managed services, and Gartner expects that this rate will increase to 28 percent by 2022.

“As cloud continues to become mainstream within most organizations, technology product managers for cloud related service offerings will need to focus on delivering solutions that combine experience and execution with hyperscale providers’ offerings,” said Mr. Nag. “This complementary approach will drive both transformation and optimization of an organization’s infrastructure and operations.”

About Gartner IT Infrastructure, Operations and Cloud Strategies Conferences

Gartner analysts will provide additional analysis on cloud strategies and infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies events taking place April 23-25 in Tokyo, April 24-25 in Sao Paulo, April 29-30 in Sydney, May 6-7 in Mumbai, June 4-5 in Frankfurt, June 25-26 in Mexico City, and November 25-26 in London.

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