Cloud Computing Adoption to Rise Rapidly Between 2016 and 2020

  • Technavio
LONDON — Positive growth is expected for many segments of the global cloud computing market over the next four years as several markets, according to forecasts by Technavio research analysts. Markets including backend as a service (BaaS), cloud management for OpenStack, and network as a service (NaaS) will witness an increase in revenues. These trends confirm an increasing dependence on broadband.

According to Technavio, the need to reduce complexities in application development will accelerate the growth of the global backend as a services market and post a massive CAGR of almost 102 percent during the period 2016 to 2020. Application of BaaS solutions makes it easier for developers to set up, use, and operate a cloud backend for creating their mobile, tablet, and web apps. IT vendors in this market are offering advanced solutions that exempt complex coding, thus vastly improving front-end tasks that include design and development of content. The growing demand for mobile apps with additional features and functionalities will continue to boost the demand for BaaS over the next four years.

Backend as a Service (BaaS)
The three major end-users of BaaS include large enterprises, SMEs, and government sectors. As of 2015, SMEs held the majority of the market share with about 64 percent of the overall market share. This is because of the widespread use of cloud-computing technology that follows the pay-per-use model. Many SMEs have also started adopting BaaS to mitigate their budget constraints and achieve scalability.

Apart from BaaS, the global network as a service market is also predicted to grow significantly at a CAGR of more than 35 percent during the forecast period. Emphasis towards an operational expenditure (OPEX) model to maximize costs controls among enterprises is one of the primary growth drivers. NaaS offerings shift the risk and resource requirements related to the operation, backups, updates, and infrastructure maintenance to third-party vendors or service providers. This helps clients to focus more on their core business competencies while saving costs through reduced capital investment on network infrastructure.

Network Functions Virtualization
According to Bharath Kanniappan, a lead analyst at Technavio for the ICT sector, “Emergence of network functions virtualization concept among telecom providers is one of the latest trends in this market. This new model will virtualize several network functions such as firewalls, load balancers, and intrusion detection devices. This network framework will help telecom companies to achieve scalability, low capital expenditure, and smooth service deployments.”

Another evolving segment is the growth of the global cloud management for the OpenStack market. The ability of OpenStack to enhance interoperability and integration by allowing the addition of new components as per the end users’ requirements has predicted this market to grow significantly and post a remarkable CAGR of over 30 percent during the forecast period. The deployment of OpenStack helps users to effectively manage private and public cloud computing platforms. It also enhances visibility and control over resources by optimizing networks, bandwidth, and disk I/O.

Some of the key vendors for cloud computing technology include Appcelerator, IBM, and Kony for backend as a service, Cisco, Juniper Networks, and VMware for network as a service, and BMC Software, HP, and Red Hat for cloud management for OpenStack.


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