The Odin 2015 Global Cloud Insights report, which identifies critical trends in cloud and assesses their impact on businesses globally, revealed that the cloud services market across emerging regions is expected to increase by a compound annual growth rate (CAGR) of almost 30% in the next three years.
The global cloud services market is currently valued at $98.7 billion (£65.5 billion), and is expected to increase by an average CAGR across the regions of 17 percent to $158 billion (£105 billion) by 2018. But drilling down on the regions shows the key growth markets over the next three years are in the emerging markets. Sub-Saharan Africa is set to achieve the largest CAGR of 28.8 percent, lifting its value from $2.3 billion (£1.5 billion) to $5 billion (£3.3 billion). Latin America and the Caribbean follow at 23.5 percent, ahead of East Asia, South Asia and Pacific regions, all with a CAGR of 21 percent. North America is expected to have the largest market value, with a CAGR of 21.1 percent, raising its value from $36.8 billion (£24.4 billion) to $51.8 billion (£34.4 billion) over the next three years. Disappointingly the European and Central Asia market hits a slightly higher than average growth, with the current market valued at $26.2 billion (£17.4 billion) and this is expected to increase by a CAGR of 17.8 percent to $42.9 billion (£28.5 billion) by 2018. Putting the European and Central Asia market as second largest after the US.
Jacek Murawski, EMEA general manager and vice president, Odin, suggested that the scalability and flexibility of cloud is ideally placed to support emerging international markets. The lack of an existing IT infrastructure means these markets are able to bypass traditional concerns associated with expensive capital expenditure (CapEx) costs and instead harness the benefits of both software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) services, which are also identified in the report.
“For emerging markets, being unburdened by legacy IT infrastructures, has meant they are ideally placed to leapfrog more mature markets when it comes to embracing new technologies, as they do not have the traditional costs associated with CapEx budgets. Historically, we have seen this pattern most notably in mobile communications and mobile business applications. Cloud similarly offers an opportunity for far-sighted businesses to achieve leadership positions,” he said.
Drilling down in terms of cloud technologies the worldwide market has IaaS with the biggest market share globally to date accounting for $37.8 billion (£25.1 billion). This figure is expected to increase to $56.2 billion (£37.3 billion) by 2018, with emerging markets ideally placed to reap the benefits of having a limited legacy IT infrastructure in place. Business applications, also defined as SaaS, is expected to achieve the best CAGR over the next three years accounting for a growth of 25.9 percent from a 2015 base of $24.2 billion (£16.01 billion). This is then followed by unified communications $19.4 billion (£12.9 billion) and web presence $17.2 billion (£11.4 billion).
“The growth and availability of cloud services will play a pivotal role in restructuring the global IT landscape. Typically, the biggest challenge established markets have when it comes to cloud adoption has centred on the migration from old physical systems. Businesses, particularly SMEs (<250employees), have been reluctant to do away with their existing infrastructure, highlighting concerns surrounding security and loss of control as to where their data is stored,” Murawski concluded.