InsightaaS: ATN often carries infographics, but until now, we've never covered one as a discrete subject in this space. However, the "Parallels SMB Cloud Insights for Global 2014" infographic warrants its own analysis.
For those unfamiliar with the company, Parallels' main business is the provision of software; the company describes itself as "a global leader in hosting and cloud services enablement and cross-platform solutions." Through time, the company has also established a position as a leading source of insight into global SMB cloud trends, publishing annual reports that offer surprisingly detailed perspectives on both technologies and global markets. The 2014 infographic provides an update delivered in pictorial rather than report form. It represents a fascinating one-screen (to be fair, one long screen) view of where cloud is and how Parallels expects it to evolve through 2016.
At the outset, the infographic divides the online world into three categories: mature markets (North America, most of western Europe, Australia and New Zealand), maturing markets, and developing markets. The line between the latter two is somewhat fluid, as China has "graduated" from developing to maturing. This change affects growth rates throughout the infographic; adding a market the size of China to any one category has a tremendous impact on future projections, as is reflected in the fact that projected growth for "maturing" countries is far higher than for either developing or mature markets in all cloud categories.
The infographic also looks at cloud service categories and at regions, though, and it is in these analyses that it offers the greatest value. We see, for example, that cloud expenditures grew by a stunning 37% in global SMBs, with expenditures on business applications leading this increase with 46% year-on-year growth. The infographic then drills down into four cloud technology categories. In the IaaS section, we see that while North America is currently the leading source of IaaS expenditures, IaaS spending in Europe is expected to grow from $5.5B to $13.1B, which will make Europe the largest IaaS region in the world. During this same period, SMB IaaS spending is expected to increase from $1.5B to $4.2B in Latin America, resulting in a CAGR of 41%. The infographic also notes that price is the most frequently cited barrier to SMB IaaS adoption (noted by 51% of Parallels research respondents), and that overall concerns about switching to IaaS have declined by 3%.
Other sections of the infographic also provide rich detail. "Web presence" (including SEO, security and content management) is a significant cloud exnditure driver in Europe. Spending on hosted communication and collaboration systems is expected to increase in all regions outside North America (where growth will be a still-substantial 32%), as objections to this approach erode, and as 32% of SMBs face installed equipment failure, and 39% recognize that hosted C&C offers a "good price point." And business applications (as predicted in the book The Death of Core Competency, published by InsightaaS Press) will grow tremendously, with mature market growth actually exceeding growth rates in developing market countries as firms with cloud experience begin to expand and integrate their online application infrastructures.
At the bottom of the infographic, Parallels offers a summary view of anticipated SMB cloud growth for 2013-2016. The conclusion? Total expenditures will reach $125B, more than double 2013's $62B. It seems that as impressive and disruptive as cloud growth has been, we should anticipate no abatement in its expansion.
From the introductory text:
The new research is in, and the results are impressive. The Parallels SMB Cloud Insights™ research results continue to show a massive SMB cloud opportunity for service, with the global market reaching $62 billion in 2013 and projected to expand at a 26% CAGR to $125 billion by 2016.
This is the fourth consecutive year Parallels has interviewed SMBs of different sizes, industries and countries about their cloud service consumption, future plans and attitudes. Across the four cloud sub-segments – Infrastructure-as-a-Service (IaaS), Web Presence and Web Applications, Communications and Collaboration, and Business Applications (often called Software-as-a-Service) – SMBs are rapidly adopting cloud services. For example, in mature markets, SMBs are already using an average of five cloud services and are expected to use nine discrete cloud services by 2016.
New global research and forecast includes these key findings:
- IaaS is expected to top $42 billion by the end of 2016, representing a 27% CAGR
- From 2012 to 2013, IaaS grew by 28% globally, from $15.9 billion to $20.4 billion. Top add-ons for hosted servers included security, database add-ons, and server backup, and the top hosted server applications included web server and database applications.
- From a geographic region perspective, IaaS will continue to grow strongly across all regions, with the strongest growth coming from Latin America, EMEA, Asia Pacific, and North America, respectively. For the first time, by 2016, the European market at $13.1 billion will be larger than the North American market at $12.1 billion...
View the remainder of the text and the infographic: Link. Thanks to Alex Sirota for highlighting this in an email.