According to Gartner’s new data, higher-than-expected spending in both the Software as a Service and Platform as a Service categories is driving growth within the overall public cloud service market.
The research firm released its findings late last week. It stated that the global SaaS market far exceeded expectations in 2016, when it earned $48.2 million. Sid Nag, Gartner research director, said that 2017 will be a similar story.
Nag stated in a prepared statement that SaaS is growing faster than expected in 2017, which will lead to a significant increase in the public cloud revenue forecast. SaaS spending is expected to grow by nearly 22 percent year-over-year, reaching $58.6 Billion by year’s close.
Nag stated that PaaS spending has also exceeded expectations in 2017, with revenue expected to grow by nearly 27% year-over-year, to $11.4 billion.
[Click on the image to see a larger view.] Projection of worldwide public cloud service revenues in billions of dollars. Source: Gartner. Gartner attributes the rise in SaaS spending in part to vendors’ ability to offer well-rounded applications in cloud environments without sacrificing functionality. The firm stated that SaaS solutions are more purpose-built and deliver better business outcomes than traditional software.
The PaaS segment appears to be riding a wave that has increased enterprise confidence. Nag stated that PaaS is expected to be the primary application development platform for enterprise-scale organizations in the future.
He said that the increasing demand for SaaS/PaaS has led old-guard software vendors such as Microsoft, SAP, and Oracle to concentrate more on cloud-based subscriptions services, possibly at the expense traditional on-premise products.
The fastest growth rate is expected to be in the Infrastructure as a Service segment (IaaS), where Amazon Web Services (AWS is the leader). IaaS spending is expected increase by almost 37 percent to $34.7 billion by 2017.
Public cloud services spending is expected to increase by more than 18% in 2017, reaching $260.2 trillion.
