Gartner: Public cloud spending to increase 19 percent annually to 2016

Emerging Asia/Pacific expected to have highest growth in cloud services
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Orlando, Fla.-- Spending on public cloud services is predicted to increase at a 19 percent compound annual growth rate (CAGR) to 2016, while overall IT spending is expected to grow at a more modest 4 percent CAGR over the same time period, according to Gartner Managing Vice President and Fellow Daryl Plummer and Vice President and Fellow David Mitchell Smith.

Gartner defines cloud computing as a "style of computing where scalable and elastic IT-related capabilities are provided 'as a service' to external customers using Internet technologies," the fellows told an audience at the Gartner Symposium ITxpo 2012 being held here.

At the same time, spending on public cloud services is estimated to make up less than 3 percent of overall IT spending, which is forecast to surpass $3.7 trillion in 2013, according to Gartner data.

Gartner expects business process as a service (BPaaS) to increase at an 11.3 percent CAGR to 2016, software as a service (SaaS) to increase at a 19.1 percent CAGR, platform as a service (PaaS) at a 26.6 percent CAGR and infrastructure as a service (IaaS) at a healthy 41.8 percent CAGR for a total of $72 billion in spending from 2012 through 2016.

Emerging Asia/Pacific, including India and Indonesia, has the highest projected growth in cloud services spending of all regions, with a 31.8 percent CAGR, followed by Greater China with 30 percent, Latin America with 26.4 percent and Eurasia with 25.9 percent, Plummer and Smith explained.

Despite high growth rates in emerging countries, spending in North America will account for 61 percent of total public cloud services spending from 2010 through 2016. Western Europe will have the lowest forecast growth, with an 11.8 percent CAGR, they added.

The Gartner fellows recommended that organizations take a tactical approach to moving applications and workloads to the public cloud. Applications and functions that can be moved to the cloud now include email, productivity applications, customer relationship management, web servers, prototyping and collaboration tools. Applications and functions that should be moved "a little later" include product design, help desk, account management and evaluations.

However, companies should not move core systems--high control applications that have relatively sensitive data or deep integration with other systems--to the cloud anytime soon, Plummer and Smith cautioned.

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