IaaS, PaaS, drive public cloud ecosystem revenue to $126 billion in Q1

New research from Synergy Research Group found that revenue in the cloud services market grew by 26% from last year.

cloud computing / cloud network

Driven by user uptake of IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service) services, public cloud ecosystem revenue during the first quarter of the year jumped by 26% to reach  $126 billion, according to new research from Synergy Research Group.

The figure takes into account revenue generated by user spending on public cloud services and infrastructure, as well as vendor spending on the equipment and facilities needed to provide cloud services.

IaaS, PaaS quarterly revenue jumps 36%

The biggest growth was seen for IaaS and PaaS, with first quarter revenue for these services growing by 36% year over year to total more than $44 billion, Synergy reported. Managed private cloud services, enterprise SaaS and CDN (content delivery networks) added another $54 billion in service revenue, having grown by an average 21% from last year.

Hyperscale data center capacity grew 18% to support burgeoning cloud uptake, driving the market for data center hardware. Furthermore, in order to meet demand, public cloud providers spent $28 billion on building, leasing and equipping their data center infrastructure, an increase of 20% .

Companies that featured the most prominently across the whole public cloud ecosystem were Microsoft, Amazon, Salesforce and Google. Adobe, Cisco, Dell, IBM, Oracle, SAP and VMware also contributed significantly to revenue growth, accounting for 60% of all public cloud-related revenue, according to Synergy's findings.

The trend for US-based companies to lead the market was also borne out across all service and infrastructure markets, with Chinese companies making up the second largest segment.

Public cloud revenue forecast to double in 3-4 years

Public cloud ecosystem revenue is expected to double in the next three to four years, said John Dinsdale, a chief analyst at Synergy Research Group, in a blog post.  As a result, cloud providers will need to grow the footprint of hyperscale data centers and generate more raw computing power, which in turn would drive the markets for data center hardware and software, Dinsdale said.

“For sure the competition will be tough, but up and down the cloud ecosystem there will be a bright future for companies that bring the right products to market in a timely fashion,” he said.

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