Cloud becoming a business process service delivery model: IDC

Says it is no longer just about IT

Conversations around Cloud services in Australia are changing, and it is no longer just about IT, says research firm, IDC.

While the fundamental value proposition of Cloud continues to be its cost-effective, pay-as-you-go opex model, Cloud services – both for IT and for business – are becoming increasingly viewed as a delivery model for business process services.

In its latest study, Australia Cloud Services 2011-2016, which polled 168 CIOs and IT executives in Australia, IDC claims almost 70 per cent of respondents expect increased confidence in using public Cloud services in the next three years for more mission critical applications and infrastructure.

IDC found more robust public Cloud Infrastructure-as-a-Service (IaaS) solutions becoming available from an expanded range of providers and Platform-as-a-Service (PaaS) gaining momentum in the past 12 months.

It said, in a statement, that IaaS Cloud services, including virtual private Cloud (vPC), took the lead over Software-as-a-Service (SaaS) for the first time and contributed to 54 per cent segment share ($524 million) of the total public Cloud services in 2012.

"Cloud service future ubiquity will mean that it will permeate the sourcing strategies of CIOs and business unit managers alike,” IDC IT services senior analyst, Raj Mudaliar, said.

IDC claimed the proliferation of vPC services from IT infrastructure vendors and IT service providers (SPs) are driving growth in the IaaS market. The uptake is also driven by the increasing number of global ISVs seeking local hosting partners, as well as migration of revenue from ITO and managed applications and infrastructure hosting markets.

“As organisations seek to transform their business operations, there is growing momentum for transition to "everything as a service," where all IT services can be consumed through a Cloud based delivery model at a significant fraction of the cost as well as a reduced implementation time,” Mudaliar said.

He said the resulting effect has great potential for the substitution of Cloud for traditional outsourcing services, and to some extent, project-based services.

IDC forecasts revenues from public IT Cloud services in Australia to exceed $2.33 billion in 2016, representing a CAGR of 24.8 per cent for the period 2012-2016.

Whilst all market segments experience strong growth, it is expecting two standout categories:

  • vPC continues its rapid growth from $251.8 million in 2012 to forecasted figures of $720.2 million in 2016. Growing at a CAGR of 30 per cent, vPC will also more than doubles its segment market share of the total public Cloud services market from 14 per cent in 2011 to 31 per cent in 2016.

  • PaaS is forecast to grow from $36.9 million in 2012 to $92.4 million in 2016, growing at a CAGR of 25.8 per cent.

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