Torrid Cloud Growth Continues

January 4, 2017, 2:34 PM UTC
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Companies continued their adoption of cloud computing services at a rapid clip in 2016, with overall growth expected to rise 25% year over year for that period, according to new numbers from Synergy Research Group. The forecaster estimated aggregate annual revenue from all those cloud segments at nearly $150 billion.

Synergy lumps two key cloud categories, known by techies as infrastructure as a service and platform as a service, into one big bucket, which together showed the most dramatic growth rate of 53%. Infrastructure as a service (aka IaaS) is typically exemplified by offerings from Amazon Web Services (AWS),Microsoft and Google (GOOGL).

Amazon (AMZN) launched its first public cloud offering more than 10 years ago and is the leader by far. It’s on track to generate $13 billion in annual revenue. Microsoft (MSFT) is making an aggressive push with Azure. Google is pushing Google Cloud Platform in this segment.

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Platform as a service (aka PaaS) combines basic infrastructure with tools that developers can use to build and run software applications. Examples of this type of service include Cloud Foundry, as well as’s Heroku and offerings. Salesforce’s (CRM) bread-and-butter sales and marketing applications fall into another category known as software as a service (Saa), in which a cloud service provider runs software applications in its own data centers and streams them to customers over the Internet.


Another category dubbed hosted private cloud, refers to services in which a third party, like Rackspace or IBM (IBM), runs the customer’s computing infrastructure on dedicated or non-shared gear. These private clouds can run either in the customer’s own data center or at a cloud service provider.

Synergy’s report includes cloud revenue from Hewlett-Packard Enterprise (HPE) and Cisco Systems (CSCO) in a separate category. Synergy analyst John Dinsdale said this is because those companies focus on provisioning (or setting up) hardware and software used to build public or private clouds. Both HPE and Cisco have scaled down their overall public cloud efforts.

The Synergy researchers confirm what many tech watchers have already concluded: Companies are moving more of their internal work to cloud services, where a third party handles basic hardware and software upgrades and fixes—tasks companies used to have to do for themselves in their own data centers.

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“Major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side,” Synergy founder Jeremy Duke said in a statement. “Cloud technologies are now generating massive revenues for technology vendors and cloud service providers, and yet there are still many years of strong growth ahead.”

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