With the use of cloud services like gmail, google docs and even facebook, individuals seem to be getting quite comfortable with using and trusting cloud services. Businesses however, have been a little slower to use the cloud, but big changes and shifts to cloud services are already well underway.
We are now seeing more and more companies use cloud services like Google apps, Salesforce, Netsuite, email marketing platforms and hundreds more cloud services that are sold with the SaaS (software as a service) distribution model.
Forrester Research has just released a research report that takes a look at the state and future size of the global cloud computing market for businesses. They predict that the global cloud computing market will go from $40.7 billion in 2011 to $241 billion in 2020. As with all these research reports, it is not the exact numbers that are interesting but the trends.
One surprising finding is that the IaaS (infrastructure as a service) revenue will peak in 2014 at $5.9 billion. This is hard to believe for us that Amazon cloud, Rackspace cloud and other bare infrastructure providers will peak in just 3 years. Anyway, this will only affect a handful of players that will be playing in this space at that that time. Amazon, Rackspace, Google and a handful of others come to mind.
The interesting trend is their projections for SaaS, this is where the massive growth is and where businesses can get tremendous benefit. The total global market size in 2011 is said to be $21.2 billion and is projected to grow to 92.8 billion in 2016. The bulk of the grow lies here, where thousands of SaaS companies will make life easier for businesses around the world. Need a CRM? Get one tomorrow with Salesforce. Need ERP? Netsuite has you covered. Need employee email, calendar and online documents? Turn on Google apps. Need cloud file storage, collaboration with mobile capability? GoAruna has you covered.
One of the draws for SaaS is that it is so easy and there is no big development, consulting, implementation costs (or much less) for companies. Also, they don’t have to maintain, improve and update the software, it is done by the SaaS provider. Then there are infrastructure considerations, datacenter management, security and global distribution for their company. It gets very costly to build, implement and maintain even one system, let alone many.
SaaS usually charges customers a simple and predictable monthly subscription fee for using the software (as a service). The software, infrastructure, security and every other factor of the service is constantly being improved, with no extra cost to the customer. Companies can now run their businesses much more cost effectively and get the very specialized software that they need without large capital expenditures (both initial and ongoing). No wonder SaaS is growing so quickly.