According to a recent annual forecast released by enterprise IT analysis giant 451 Research, revenue for Cloud-Enabling Technologies (CET) is expected to reach $22.6 billion by 2016. Citing Cloud-Enabling Technologies as those that are installed, implemented and consumed on-site, 451 Research has given more structure to the overall definition of CET by segmenting it into three primary categories: Virtualization, Security, and Automation & Management. This stands in distinction to what are commonly referred to as Cloud-as-a-Service technologies, such as a web host or virtual file storage vendor. The primary difference between CET and CaaS lies in the means of delivery – with Cloud-Enabling Technologies, delivery is handled on-premises, while Cloud-as-a-Service technologies deliver their services via off-site third parties. According to the annual forecast published by 451 Research’s Market Monitor service, Cloud-as-a-Service technologies will also grow to $19.5 billion in 2016.
The Cloud-Enabling Technologies market continues to experience significant growth and increasing rates of adoption; Market Monitor predicts that CET will achieve a 21% Compound Annual Growth Rate (CAGR) within roughly four years, with aggregate market revenues increasing from $10.6 billion in 2012 to $22.6 billion in 2016. 451 Research predicts that 66% of this revenue will stem from virtualization, which is the basic foundation of cloud computing. Although virtualization-based services and systems claim the lion’s share of this projected revenue, they are only expected to attain a 16% CAGR from 2012-2016 due to being the most mature segment of the market.
Automation and Management is a broader category that includes technologies that are already in use as well as cloud-based platforms. This category is expected to enjoy an impressive 28% CAGR due to the growing need for systems and tools that will assist users in controlling and managing first-tier virtualization environments. As cloud-based implementations become more ubiquitous, the need for supporting technologies will dominate this phase of growth in automation and management of Cloud-Based Technologies.
Security is the final category highlighted by 451 Research’s Market Monitor forecast. Although no one vendor has claimed a place of dominance in this arena, the overall Security category is expected to experience the highest CAGR of all the categories from 2012 to 2016, weighing in at a healthy 29 percent. This is primarily due to increasing security concerns related specifically to vulnerabilities that have been discovered in several cloud-based implementations. Add to the mix the recent revelations regarding the NSA domestic spying scandal, and it is easy to see why security tops the list of concerns for Cloud-Enabling Technologies.
As 451 Research’s Market Monitor forecast reports, overall revenue for Cloud-as-a-Service technology is not expected to be quite as robust as its CET cousin, but there will be a respectable increase over the next four years nonetheless. Cloud-as-a-Service revenues are expected to grow from $5.7 billion in 2012 to $19.5 billion in 2016, boasting a hefty 36% CAGR. Although security issues have been somewhat of a “speed bump” due to recently highlighted vulnerabilities such as insecure APIs and exploitable software interfaces, the economic efficiency, convenience and scalability of CaaS implementations have outweighed security concerns in the minds of many businesses. As the security segment of the cloud computing market matures, greater platform stability will more than likely emerge as demand for cloud-based services of all stripes continues to increase, from simple domain hosting all the way up to running the CIA.
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