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WW CRM Market Share

Worldwide spending on customer experience and relationship management (CRM) software grew 15.6% to reach $48B in 2018, according to research from Gartner-CRM remains both the largest and the fastest growing enterprise application software category.

Worldwide enterprise application software revenue totaled more than $194B in 2018, a 12.5% increase from 2017 revenue of $172B – CRM made up almost a quarter of that revenue.

Approximately 73% of CRM spending was on software as a service (SaaS) in 2018, which is expected to grow to 75% of total CRM software spending in 2019, with agility and flexibility being big drivers, along with the requirement for remote and mobile users.

The top five CRM software vendors accounted for more than 40% of the total market in 2018.

CRM remains the largest and fastest growing enterprise software category today according to the latest market sizing

The 4 segments of CRM include: customer service and support, digital commerce, marketing, and sales.

All four subsegments of the CRM market grew by more than 13.7%, with marketing emerging as the fastest growing segment, increasing by 18.8% and representing more than 25% of the entire CRM market.

Customer service and support retain its No. 1 position, contributing 35.7% of CRM market revenue, attaining $17.1B in revenues in 2018.

KEY HIGHLIGHTS

  • Salesforce dominated the worldwide CRM market with a 19.5% market share in 2018, over double its nearest rival, SAP, at 8.3% share.
  • Worldwide spending on customer experience and relationship management (CRM) software grew 15.6% to reach $48.2B in 2018.
  • 72.9% of CRM spending was on software as a service (SaaS) in 2018, which is expected to grow to 75% of total CRM software spending in 2019.
  • Worldwide enterprise application software revenue totaled more than $193.6B in 2018, a 12.5% increase from 2017 revenue of $172.1B. CRM made up nearly 25% of the entire enterprise software revenue market.

 

Adobe and Salesforce grew faster than the overall market, increasing CRM revenues 21.7% and 23.2% respectively.

  • Adobe’s CRM sales jumped from $2B in 2017 to $2.4B in 2018.
  • Salesforce CRM revenues increased from $7.6B in 2017 to $9.4B in 2018, growing the fastest of all competitors in this market.
  • SAP grew 15.5% between 2017 and 2018, just below the overall market growth of 15.6%.
  • Microsoft (15%) and Oracle (7.1%) grew slower than the market. The following graphic compare growth rates between 2017 and 2018.

CRM-Software-Market-Share-By-CRM-Vendor

Source: Gartner

WW Public Cloud Service Revenue Forecast

Public Cloud Soaring To $331B By 2022 According To Gartner

Gartner predicts the worldwide public cloud service market will grow from $182.4B in 2018 to $331.2B in 2022, attaining a compound annual growth rate (CAGR) of 12.6%.

Spending on Infrastructure-as-a-Service (IaaS) is predicted to increase from $30.5B in 2018 to $38.9B in 2019, growing 27.5% in a year.

Platform-as-a-Service (PaaS) spending is predicted to grow from $15.6B in 2018 to $19B in 2019, growing 21.8% in a year.

Business Intelligence, Supply Chain Management, Project and Portfolio Management and Enterprise Resource Planning (ERP) will see the fastest growth in end-user spending on SaaS applications through 2022.

Gartner is predicting the worldwide public cloud services market will grow from $182.4B in 2018 to $214.3B in 2019, a 17.5% jump in just a year.

By the end of 2019, more than 30% of technology providers’ new software investments will shift from cloud-first to cloud-only, further reducing license-based software spending and increasing subscription-based cloud revenue.

WW-Public-Cloud-Service-Revenue-Forecast

 

Source: Gartner

WW Public Cloud Service Revenue CAGRS

Comparing Compound Annual Growth Rates (CAGRs) of worldwide public cloud service revenue segments from 2018 to 2022 reflects IaaS’ anticipated rapid growth.

WW-Public-Cloud-Service-Revenue-CAGRS

Source: Gartner

WW Public Cloud Service Revenue Forecast

Gartner is predicting the worldwide public cloud services market will grow from $182.4B in 2018 to $214.3B in 2019, a 17.5% jump in just a year.

By the end of 2019, more than 30% of technology providers’ new software investments will shift from cloud-first to cloud-only, further reducing license-based software spending and increasing subscription-based cloud revenue.

WW-Public-Cloud-Service-Revenue-Forecast

Source: Gartner

Cloud Computing Service Revenue – Amazon, Microsoft, Google

 

Cloud-ServiceRevenue-Amazon-Microsoft-Google

Source: TechCrunch

PaaS & IaaS Cloud Computing Usage – CIO Survey

Cloud-Computing-Usage-CIO-Survey

Source: TechCrunch

Cloud Infrastructure Services Vendor Market Share

Vendor market share for the cloud infrastructure services market worldwide from the fourth quarter of 2017 to the first quarter of 2019.

The most popular vendor in the market, Amazon Web Services (AWS), has maintained a steady lead in terms of market share, controlling 31.5%t of the entire cloud infrastructure services market in the first quarter of 2019.

Cloud-Infrastructure-Services-Vendor-Market-Share

Source: Statista

Cloud Computing Adoption By Market Segment

Q1 spend on cloud infrastructure services jumped 42% from the first quarter of 2018.

Predictably this growth rate was somewhat lower than that seen throughout 2018 as the massive scale of the market now forces growth rates to moderate.

Meanwhile Amazon again grew faster than the overall market, as it has done for the last eight quarters.

Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were well over $21 billion, with revenues for the last four quarters now reaching over $75 billion.

Public IaaS and PaaS services account for the bulk of the market and those grew by 48% in Q1.

In public cloud the dominance of the top five providers is even more pronounced, as they control over three quarters of the market.

Geographically, the cloud market continues to grow strongly in all regions of the world.

Cloud-Infrastructure-Services-Spend

Source: Synergy

Cloud Computing Adoption By Market Segment

Average cloud penetration for customers in each of the five segments—all five expect to deploy more in the cloud, although the pace will vary significantly.

Transformational. These early cloud computing adopters continue to set the bar for the market, but some are reaching a plateau in adoption.

Heterogeneous. The diversity of existing IT environments and workloads leads these customers to take a more measured pace of cloud computing adoption.

Safety Conscious. Cloud computing adoption continues to increase for these customers, although at a slightly slower pace.

Price Conscious. Cloud computing adoption by price-conscious customers has outstripped expectations as they pursue the economic benefits of moving to the cloud.

Average-cloud-computing-penetration-by-market-segment-adoption

Source: Bain

Cloud Computing Adoption By Market Segment

Slow and Steady could be the largest segment in cloud spending by 2022

Most of the growth in cloud adoption will come from laggards, as they become the largest segment in cloud spending by 2022 .

Laggards waited on the sidelines while early adopters tested the waters, but have waded in over the past three to five years.

Half the growth in cloud spending comes from this group. For cloud technology providers searching for growth from the cloud, this is the category to focus on.

IoT-Adoption-Slow-Growth-in-2020-TheAccelerated-Grwoth

 

Source: Bain

Cloud Computing Adoption – By Market Size & Market Segment

Slow and Steady could be the largest segment in cloud spending by 2022

Most of the growth in cloud adoption will come from laggards, as they become the largest segment in cloud spending by 2022 .

Laggards waited on the sidelines while early adopters tested the waters, but have waded in over the past three to five years.

Half the growth in cloud spending comes from this group. For cloud technology providers searching for growth from the cloud, this is the category to focus on.

Slow and Steady. Most of the growth in cloud computing adoption will come from these customers, as they become the largest segment in cloud spending by 2022.

Cloud-Computing-Adoption-By-Market-Size-and-Market-Share

 

Source: Bain

Cloud Computing Enterprise SaaS Market Share & Revenue Growth

The enterprise SaaS market is now generating $20B in quarterly revenues for software vendors, a number that is growing by 32% per year.

Microsoft is in the lead with a worldwide market share of over 17% and is now the leading SaaS vendor primarily due to its leadership in the high-growth collaboration segment.

Cloud-Computing-Enterprise-SaaS-Market-Share-Revenue-Growth

Source: SynergyResearchGroup

Cloud Computing Private Cloud Spending

Wikibon projects the True Private Cloud (TPC) worldwide market will experience a compound annual growth rate of 29.2%, reaching $262.4 b by 2027.

TPC growth is expected to far outpace the infrastructure-as-a-service (IaaS) growth of 15.2% over the same period.

A true private cloud is distinguished from a private cloud by the completeness of the integration of all aspects of the offering, including performance characteristics such as price, agility, and service breadth.

Cloud-Computing-Private-Cloud-Spending

Source: Wikibon

Cloud Computing WW Public Cloud Service Revenue Forecast

The worldwide public cloud services market is projected to grow 17% in 2019 to total $206B, up from $176B in 2018, according to Gartner.

In 2018, Gartner forecasts that the market will grow 21%, up from $145B in 2017.

The fastest-growing segment of the market is cloud system infrastructure services (infrastructure as a service or IaaS), which is forecast to grow 28% in 2019 to reach $40B, up from $31B in 2018.

Software as a service (SaaS) remains the largest segment of the cloud market, with revenue expected to grow 18% to reach $85B in 2019.

By 2022, Gartner expects that 90% of organizations purchasing public cloud IaaS will do so from an integrated IaaS and platform as a service (PaaS) provider, and will use both the IaaS and PaaS capabilities from that provider.

Cloud-Computing-WW-Public-Cloud-Service-Revenue-Forecast

Source: Gartner

Cloud Computing Spending in Key IT Segments

More than $1.3T in IT spending will be directly or indirectly affected by the shift to cloud by 2022. 28% of spending within key enterprise IT markets will shift to the cloud by 2022, up from 19% in 2018.

The largest cloud shift before 2018 occurred in application software, particularly driven by customer relationship management (CRM) software, with Salesforce dominating as the market leader.

CRM has already reached a tipping point where a higher proportion of spending occurs in the cloud than in traditional software.

Gartner says 28% of Spending in Key IT Segments Will Shift to the Cloud by 2022.

Cloud-Computing-Spending-in-Key-IT-Segments

Source: Gartner

Cloud Computing WW Cloud IT Infrastructure Market Forecast By Development Type

Total spending on IT infrastructure products (server, enterprise storage, and Ethernet switches) for deployment in cloud environments is projected to attain a 10.9% year-over-year growth rate, reaching $52.3B in 2018 with year-over-year growth of 10.9%

Spending on IT Infrastructure for Deployment in Cloud Environments is forecast to Grow 10.9% in 2018, according to IDC.

Public cloud data centers will account for a majority of this spending, 65.9%, growing at the fastest annual rate of 11.3%.

Off-premises private cloud environments will represent 13.0% of cloud IT infrastructure spending, growing at 12.0% year over year.

On-premises private clouds will account for 61.7% of spending on private cloud IT infrastructure and will grow 9.1% year over year in 2018.

Long-term, IDC expects spending on off-premises cloud IT infrastructure will grow at a five-year compound annual growth rate (CAGR) of 10.8%, reaching $56B in 2022.

Public cloud data centers will account for 83.6% of this amount growing at a 10.6% CAGR while spending on off-premises private cloud infrastructure will increase at a CAGR of 11.4%.

Combined with on-premises private cloud, overall spending on cloud IT infrastructure will grow at an 10.9% CAGR will surpass spending on non-cloud IT infrastructure by 2022.

Spending on on-premises private cloud IT infrastructure will grow at a 11.5% CAGR, while spending on non-cloud IT (on-premises and off-premises combined) will decline at a 2.7% CAGR during the same period.

Cloud-Computing-WW-Cloud-IT-Infrastructure-Market-Forecast-By-Development-Type

Source: IDC

Cloud Computing as a Service Market Revenue

Building the infrastructure to support cloud computing now accounts for more than a third of WW IT spending, according to IDC.

Spending on traditional, in-house IT continues to slide as computing workloads continue to move to the cloud, whether that is public cloud services offered by vendors or private clouds built by enterprises themselves.

Gartner predicts that half of global enterprises using the cloud now will go all in by 2021.

According to Gartner, global spending on cloud services will reach $260B this year up from $219.6B.

Cloud-Computing-as-a-Service-Market-Revenue

Source: 451 Research

WW Public Cloud Market Forecast

IDC predicts that businesses will spend $128 billion on public cloud this year

WW-Public-Cloud-Market-Forecast

Source: Gartner

Technology Purchases – Hosted Cloud Budget

Highest spending categories overall are: online backup/recovery (15%), email hosting (11%), online productivity (9%), and web hosting (9%).

Companies with 500+ employees are putting a greater percentage of their cloud budgets towards cloud storage/file-sharing services, developer tools, and IT management tools.

Companies with 100-499 employees expect to invest a greater portion of their cloud budget on cloud-based productivity solutions

Smaller companies plan to put a bigger portion of their budget toward web hosting and email hosting – companies with less than 100 employees see spending on email hosting services rising from 11% of their cloud budget in 2018 to 19% in 2019.

Technology-Purchases-Hosted-Cloud-Budget
Source: Spiceworks

Technology Purchases – Managed Services Budget

When it comes to managed services budgets for companies in North America, here’s the breakdown: managed hosting (13%), storage/backup (9%), and security (10%) top the list.

When it comes to managed services budgets for companies in North America with 5,000+ employees, here’s the breakdown: managed hosting (8%), storage/backup (8%), and security (10%) top the list.

Technology-Purchases-Managed-Services-Budget

Source: Spiceworks

Plans to Utilize Cloud Computing Infrastructure

In 2018, 73% of companies plan to use cloud computing infrastructure

In 2018, 77% of companies with more than 1,000 employees plan to use cloud computing infrastructure

In 2018, 77% of companies with less than 1,000 employees plan to use cloud computing infrastructure

 

Plans-to-Utilize-Cloud-Computing-Infrastructure

Source: IDG

Total Cloud Computing Budget Allocated to Cloud Computing

Average Investment is $2.2M

The average investment for companies with more than 1,000 employees is $3.5M

The average investment for companies with less than 1,000 employees is $899K

 

Total-Cloud-Computing-Budget-Allocated-to-Cloud-Computing

Source: IDG

Speed Drives Cloud Computing Investments

The greatest drivers for cloud computing for  companies with more than 1,000 companies are:

  • Improving the speed of IT delivery
  • Greater flexibility to react to changing market conditions
  • Enabling business continuity
  • Improving customer support or services
  • Lower total cost of ownership

Speed-Drives-Cloud-Computing-Investments

Source: IDG

Preferred IT Cloud Service Delivery Models

Of all IT environments

  • Non Cloud 52%
  • SaaS 23%
  • PaaS 16%
  • IaaS 9%

Of those using Cloud Delivery

  • SaaS 89%
  • PaaS 61%
  • IaaS 73%

Preferred-IT-Cloud-Service-Delivery-Models

Source: IDG

Cloud Spending Forecast by Application

Cybersecurity, 72% increase

Cloud Computing, 67% increase

Business Process Management, 63% increase

Customer Experience, 50% increase

Cloud-Spending-History-Forecast

Source: CIO

Cloud Market Growth & Market Share

New data from Synergy Research Group shows states that the cloud market passed the $250B milestone in 2018.

The cloud market grew by 32% from 2017.

The IaaS & PaaS services segments both grew at 50%.

Hybrid cloud management software grew at 41%.

Enterprise SaaS and public cloud infrastructure both grew at 30%.

Hosted private cloud infrastructure services grew at 29%.

Cloud-Market-Growth-Marketshare

Source: Synergy

2018 Cloud Computing Stats

  • Seventy-three percent of organizations have at least one application, or a portion of their computing infrastructure already in the cloud – 17% plan to do so within the next 12 months.
  • The average cloud budget is up from $1.62 million in 2016 to $2.2 million today. This does change by company size with enterprise organizations investing $3.5 million and SMBs investing $889,000 (which is up from $286K in 2016).
  • More than one third of respondents (38%) shared that the IT department feels pressure to migrate 100% to the cloud.
  • Organizations are utilizing a mix of cloud delivery models. Currently the average environment is 53% non-cloud, 23% SaaS, 16% IaaS and 9% PaaS; however, will evolve to only 31% non-cloud within 18 months.
  • Forty-two percent of organizations are using multi cloud. The top two benefits of a multi cloud strategy are increased cloud options (59%) and easier and faster disaster recovery (40%).
Source: IDG

TOP BUSINESS OUTCOMES DRIVING CLOUD COMPUTING INVESTMENTS

Cloud Computing Adoption and Spending are both on the Rise

Understanding-Cloud-Computining-to-Cloud-Plans-Applications-MigratSoftware as a Service (SaaS) is still the most common cloud service model across companies of all sizes.

Specifically, 89% of companies use SaaS somewhere in their IT environment – 73% of companies Infrastructure as a Service (IaaS) and 61% use Platform as a Service (PaaS).

The average IT environment is increasingly cloud-based, expanding from roughly half the environment in the cloud today to more than two-thirds in just 18 months. Today’s average IT environment is:

  • 52% non-cloud
  • 23% is SaaS
  • 16% is IaaS
  • 9% is PaaS

In the next 18 months, though, non-cloud delivery will account for less than a third (31%) of the average IT environment, while SaaS will drive 33%, IaaS 22%, and PaaS 14%.

It’s estimated that SaaS will be in use at 95% of companies, IaaS at 83%, and PaaS at 73%

Source: IDG

TOP BUSINESS OUTCOMES DRIVING CLOUD COMPUTING INVESTMENTS

Understanding-Cloud-Computing-Plans-Business-Goals-Drive-Cloud-InvestmentsDespite years of discussion about the cloud as a source of cost savings, IDG respondents report that the primary reason for their cloud investments is to enable IT to:

  • Improving the speed of IT service delivery (71%)
  • Increasing flexibility to react to changing market conditions (63%)
  • Enabling business continuity (58%)
  • Improving customer support and services (57%).

Companies say they use SaaS solutions to save IT staff time and ultimately improve the customer experience.

SaaS investments are driven by the hope to

  • Decrease manual maintenance (62%)
  • Increase productivity (55%)
  • Improve end user experience (53%)
  • Provide greater access and reliability (53%)

Companies say they’ve implemented IaaS solutions for:

  • Scalability (68%)
  • Flexibility (53%)
  • Reliability (51%)
  • Increased agility (51%)

Companies that deploy PaaS cite the need to

  • Save time and costs, particularly the ability to eliminate server and storage overhead (56%)
  • In-house maintenance and updates (51%)
  • Developers allow for faster and more agile process (48%)
  • Support personnel costs (48%)

IDG respondents also point to the current and future impact of cloud investments on the structure and operations of the IT department.

The survey respondents expect that in the next 12 months, cloud computing investment will increase in the areas of

  • IT/business collaboration (49%)
  • Enable the company to rethink its IT organization structure (48%)
  • Allow it to retrain or reposition current IT staff more effectively (43%)
  • Create openings for new IT talent and skills (41%)
Source: IDG

IaaS & PaaS Cloud Market Share

AWS market share, 33%

AZURE market share, 13%

GCP market share, 6%

All others, 48% share

Source: CBINSIGHTS

10 Key Developments Will Drive Continued Growth in Cloud Usage & Spending

10-Key-Developments-Will-Drive-Continued-Growth-in-Cloud-Usage-&-Spending

Source: Forrester

Forrester’s 10 Cloud Computing Predictions For 2018

  • Amazon Web Services (AWS), Google and Microsoft will capture 76% of all cloud platform revenue in 2018, expanding to 80% by 2020.
  • The total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate (CAGR).
  • Amazon Web Services (AWS), Google and Microsoft will capture 76% of all cloud platform revenue in 2018, expanding to 80% by 2020.
  • Microsoft Azure Stack sparks a jump in private and hybrid cloud spending globally in 2018.
  • The total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate (CAGR).
  • Forrester predicts that more than 50% of global enterprises will rely on at least one public cloud platform to drive digital transformation and delight customers.
  • Kubernetes has won the war for container orchestration dominance.
  • Enterprises will shift 10% of their traffic from carrier backbones to other providers, and telecom providers like AT&T and Verizon will feel the effects.
  • Key takeaways from Forrester’s 10 Cloud Computing predictions for 2018 include the following:
  • The total global public cloud market will be $178B in 2018, up from $146B in 2017, and will continue to grow at a 22% compound annual growth rate (CAGR).
  • Public cloud platforms, the fastest growing segment, will generate $44 billion in 2018. By the end of 2017, Forrester expects that half of all global enterprises will rely on public cloud platforms.
  • AWS, Google, and Microsoft will capture 76% of all cloud platform revenue in 2018; 80% by 2020. Microsoft, Oracle, and Salesforce together have a 70% share of all SaaS sales force automation and customer service subscription revenue.
  • Forrester predicts SaaS vendors will compete more at the platform level, running portions of their services on Amazon AWS, Microsoft Azure, Google Cloud Platform (GCP) or Oracle Cloud in 2018.
  • Given the increased demands for application customization, combined with the convergence of digital technologies such as IoT and AI, Forrester is predicting that SaaS vendors will de-prioritize their platform efforts to attain global scale and select from AWS, Azure, GCP, or Oracle Cloud.
Source: Forrester

Global SaaS Penetration Rate By Application

Rate of public cloud application services/software as a service (SaaS) penetration worldwide in 2015 and 2020, by application type

Global-SaaS-Penetration-Rate-By-Application

Source: STATISTA

Gartner Magic Quadrant for Cloud Infrastructure as a Service 2018

The number of vendors dropped from 14 to just 6

Gartner predicted that the cloud system infrastructure services would grow over 36% to reach $34B+ in 201

Top – Alibaba Cloud, Amazon Web Services, Google, IBM, Microsoft and Oracle.

Bottom – CenturyLink, Fujitsu, Interoute (acquired by GTT in Feb), Joyent (owned by Samsung), Virtustr

Gartner-Magic-Quadrant-for-Cloud-Infrastructure-as-a-Service-2018

Source: Atscale

BESSEMER VENTURE PARTNERS CLOUD STACK PREDICTIONS

Rise of Serverless Computing

  • This emerging type of computing brings more agility and more complexity.
  • Startups are now focusing on how containers can work together and how these containers can be secured.
  • The future will be about how to manage containers at scale.

APIs Drive Innovation

  • APIs are driving innovation everywhere

Blockchain Finds a Home in the Enterprise

  • Compelling applications will emerge in enterprise industries including food, retail and aviation.

Payments-as-a-Service (PaaS)

  • Software and payments used to live apart but now companies are taking a share of payment processing from software vendors and merchant acquirers.

System of Record Moves to System of Results

  • Organizations will place greater emphasis on what data can provide to their organization and how they can make it actionable.

Growth of the Screenless Software Moment

  • Other large tech companies are expected to follow Amazon’s lead (Alexa) and invest in expanding their voice capabilities.

Values Create Value

  • 2017 served as a stark reminder that company values and the voice of the employee matter now more than ever.
  • Founders will place greater emphasis on establishing the cultural heart of their companies earlier rather than later.

The Cloud is Flat

Silicon Valley is still the center of innovation, but other cities are thriving including Criteo (Paris), ServiceTitan (Glendale, California) and Shopify (Canada).

Bessemer-Venture-Partners-Cloud-Stack-Predictions

 

SOURCE: BESSEMER VENTURE PARTNERS

Gartner’s Outlook Cloud Computing Market Growth

Hottest Cloud Markets in 2018 are:CRM, Office Suites, ERP and IaaS

Geographically, North America is the most mature cloud market followed by western Europe
China, India and Russia are increasing IT spending on cloud computing in a catch up mode

Gartner's-Outlook-Cloud-Computing-Market-Growth

Source: Gartner

Gartner’s Outlook Cloud Computing Market IaaS PaaS SaaS

Top Cloud Providers to Squeeze Out Smaller Competitors
The top 10 vendors have more than 50% share of IaaS, PaaS and SaaS markets
Cloud markets are bifurcating, particularly in infrastructure services
Top cloud providers growth outpaces market growth which results in increased market share

Gartner's-Outlook-Cloud-Computing-Market-IaaS-PaaS-SaaS

Source: Gartner

Public Cloud Adoption Trends = AWS, Azure, Google

Public Cloud Adoption, 2016 vs. 2017

% of Respondents Running Applications

Public Cloud Adoption, 2017
% of Respondents Running, Experimenting, or Planning to Use Applications

Public-Cloud-Adoption-Trends-AWS-Azure-Google

Source: Kleiner Perkins

Cloud Computing Startup Research – Cloud Market Value

The geographical analysis global cloud business analysis below is based on over 19,000 companies currently operating SaaS, PaaS, IaaS and enterprise software companies, plus over 20,000 funding rounds, to determine
statistically relevant patterns of regional development.

In 2017, over 60% of companies were located in North America (United States 59.57%, Canada 3.22%).

Europe represent over 20%.

Silicon Valley and it’s surrounding area accounted for just over 16%.

New York represents almost 6%.

Southern California accounts for just over 5%.

Boston and London provide just over 4%.

Asia as a whole represents almost 8%.

The Middle East has almost 3%.

Cloud-Computing-Startup-Research-Cloud-Market-Value

Source: Crozdeck

Cloud Computing Startup Research – Revenue Growth

Revenue for the Cloud IT market (excluding advertising) is expected to increase from $129B in 2016 to $260B by the end
of 2020 – a compound annual growth rate (CAGR) of 19%.

A Bain & Company study found that from 2012 to 2015, cloud demand accounted for 70% of IT market growth, and is expected to represent 60% of new growth through 2020.

The public cloud services market is expected to grow at 20% in 2018 – revenue of $187B. Growth in 2017 was 20%.

The SaaS market is projected to reach $71B in 2018.

Infrastructure-as-a-Service (IaaS) is forecast to grow the fastest – 36.6% in 2017 or $35B.

The Asia-Pacific region is forecast to reach a CAGR of over 30% until 2022.

Cloud-Computing-Startup-Research-Revenue-Growth

Source: Crozdesk 

Worldwide Cloud IT Infrastructure Revenues Growth

According to IDC, Worldwide Quarterly Cloud IT Infrastructure vendor revenues grew 26% year over year in Q2’17 to $12.3B

Public Cloud infrastructure revenue grew 34% (y/y) and now represents 33.5% of the $8.7B total worldwide IT infrastructure spending

Private Cloud revenue reached $3.7B or 10% growth

Total worldwide cloud IT infrastructure revenue has almost tripled in the last four years

Traditional (non-cloud) IT infrastructure revenue continues to decline (dropped almost 4%)

Public Cloud now represents 70% of the total cloud IT infrastructure revenue

The fastest growing segment in the public cloud infrastructure space was Enterprise Storage Systems with revenue up 30% compared to the same quarter of the previous year

Server and Ethernet Switch public cloud IT infrastructure revenues were up 25% and 27% respectively

Private cloud infrastructure spending continues to be driven by the server market (almost 60% of the revenue)

Worldwide Cloud IT Infrastructure Revenues Growth

Source: IDC

Worldwide Public Cloud Services Market Revenue – Gartner

Global SaaS revenue in 2016 exceeded Gartner’s forecast by $48B

Gartner expects SaaS revenue to climb 21% in 2017 to reach $59B

Gartner expects Infrastructure as a Service (IaaS)to be the fastest growing segment in the SaaS market – 37% growth is expected in 2017 or $35B

The Compound Annual Growth Rate (CAGR)for worldwide public cloud services of 23% is expected by Gartner to outpace the overall market growth of 13% through 2020

Gartner expects Software-as-a-Service (SaaS) revenue to grow from $59B in 2017 to $100B in 2020.

Gartner expects a 15.7% compound annual growth throughout the forecast (2016 – 2020) period for SaaS

Worldwide Public Cloud Services Market Revenue - Gartner

Source: Forbes

Gartner Forecasts Worldwide Public Cloud Services Revenue to Reach $411B

Strong SaaS and IaaS Performance Is Driving Growth in 2017

Gartner expects the worldwide public cloud services market revenue to grow 18.5% in 2017 to total $260B, up from $220B in 2016

SaaS revenue is expected to grow over 20% in 2017 to reach $59B

Cloud system infrastructure services (infrastructure as a service [IaaS]) is expected to be the fastest growing segment (37% growth in 2017

About 17% of the total market revenue for infrastructure, middleware, application and business process services had shifted to cloud and this trend is expected to continue through 2021 to approximately 28%

Gartner expects 70% of public cloud services revenue to be dominated by the top 10 public cloud providers through 2021

Gartner Forecasts Worldwide Public Cloud Services Revenue

Source: Gartner

Worldwide CAGRs By Cloud Service Category – Gartner

Gartner believes that infrastructure, middleware, application and business process services spending are the primary factors driving higher CAGRs in Cloud Services

Gartner estimates that about 17% of the total market revenue for these services have shifted to the cloud

IT spending will be for cloud-based infrastructure, middleware, application and business process services will reach 28% the total market by 2021, according to Gartner

Global CAGRs By Cloud Service Category

Source: Forbes

Gartner Forecasts Worldwide Public Cloud Services Market Share

Strong SaaS and IaaS Performance Is Driving Growth in 2017

Gartner expects the worldwide public cloud services market revenue to grow 18.5% in 2017 to total $260B, up from $220B in 2016

SaaS revenue is expected to grow over 20% in 2017 to reach $59B

Cloud system infrastructure services (infrastructure as a service [IaaS]) is expected to be the fastest growing segment (37% growth in 2017

About 17% of the total market revenue for infrastructure, middleware, application and business process services had shifted to cloud and this trend is expected to continue through 2021 to approximately 28%

Gartner expects 70% of public cloud services revenue to be dominated by the top 10 public cloud providers through 2021

Worldwide IaaS Public Cloud Services Market Share

Source: Gartner

Mary Meeker’s Annual Internet Trends Report 2017 – Macro Trends

Cloud Evolution / Tools Are Paving The Way for Innovation Across Infrastructure Landscape

  • New Methods of Software Delivery
  • APIs / Browser Extensions creating new wave of capabilities (+ companies) for both companies and end users

Containers / Microservices

  • Simplify software development process / improve consistency between testing & production environments / reduce complexity of managing & updating apps due to modular approach

Elastic Analytical Databases

  • Likes of Google BigQuery / Snowflake / AWS Redshift Spectrum nearly infinitely scalable / usage based + have minimal maintenance requirements

Edge Computing

  • Pushing compute away from centralized nodes & closer to sources of data addresses many IT challenges when running data-centric workloads in cloud – reduces latency / can have security + compliance benefits
Source: KPCB Internet Trends Report

 

 


 


Go to Market Cloud Computing Research – Cloud Adoption

Go to Market Cloud Computing Research - Cloud Adoption

 


Go to Market Cloud Computing Research – Most Popular Cloud Apps

Go to Market Cloud Computing Research - Most Popular Cloud Apps

Source: IDG (reg required)


Go to Market Cloud Computing Research – Top Cloud Computing Challenges

Go to Market Cloud Computing Research - Top Cloud Computing Challenges

Source: IDG (reg required)


Go to Market Cloud Computing Research – Cloud Models

Go to Market Cloud Computing Research - Cloud Models

Source: IDG (reg required)


Go to Market Cloud Computing Research – Average Cloud Investment

Go to Market Cloud Computing Research - Average Cloud Investment

Source: IDG (reg required)


Go to Market Cloud Computing Research – Most Popular Cloud Apps

Go to Market Cloud Computing Research - Most Popular Cloud Apps

Source: IDG (reg required)


Go to Market Cloud Computing Research – Cloud Growth By Segment

Cloud Growth By Segment Synergy Research Group

 $148B Cloud Market (vendor revenues for the four quarters ending 9/16) Growing at 25% Annually

  • IaaS & PaaS services had the highest growth rate at 53%
  • Hosted private cloud infrastructure services grew at 35%
  • Enterprise SaaS grew at 34%
  • IaaS and PaaS spending are expected to grow at a CAGR of 30.1% and 32.2%, respectively.

Source: Synergy Research Group


Go to Market Cloud Computing Research – Public SaaS Cloud Revenue & Market Share

Public SaaS Cloud Revenue & Market Share

  • SaaS is expected to continue to dominate the cloud computing space – capturing nearly two-thirds of public cloud spending in 2017 and approximately 60% in 2020.
  • Salesforce lost its leadership position in the overall SaaS space to Microsoft in 2Q16
  • Salesforce continues to dominate CRM with a market share of 19.7%
  • SAP has a 10.2% share of the CRM market.
  • Oracle, Microsoft, and Adobe Systems round out the top 5 CRM vendors, in terms of market share.

Source: IDC Worldwide Public Cloud Services Spending Forecast


Go to Market Cloud Computing Research -Cloud Billing Markets

Go to Market Cloud Computing Research -Cloud Billing Markets

  • MarketsandMarkets shows growth in the cloud billing market growing at a CAGR (compound annual growth rate) of 23.9% to become a $16.6B market by 2021, as compared to $5.7B in 2016.
  • Asia-Pacific was expected to have the fastest growth rate in 2016
  • North America was expected to be the market share leader
  • Among cloud billing services, SaaS (software-as-a-service) is gaining momentum due to its potential to offer customized and innovative services.

Go to Market Cloud Computing Research -$148B Cloud Market Growing at 25% Annually

Go to Market Cloud Computing Research -Cloud Services & Infrastructure Markets

Synergy Research Group research shows that operator and vendor revenues grew to $148B for the four quarters ending September 2016 -25% on an annualized basis.

  • IaaS & PaaS services grew at 53%
  • Hosted private cloud infrastructure services grew at 35%
  • Enterprise SaaS grew at 34%

Go to Market Cloud Computing Research – SaaS Industry Metrics – Growth by Size of Company

Go to Market Cloud Computing Research -Cloud Platform TAM

  • From 2103 through 2018, spending on cloud computing infrastructure and platforms is expected to grow at a 30% CAGR, compared with 5% growth for the overall enterprise IT.
  • Goldman Sachs estimates that Amazon has taken in approximately $4B in revenue, or 26% of the IaaS and PaaS markets.

Source: Forbes


Go to Market Cloud Computing Research – SaaS Industry Metrics – Growth by Size of Company

  • The graphic below, provided by Pacific Crest Securities(registration required) represents SaaS companies that have more than $2.5M in annual revenues.
  • The fastest growing segment of those surveyed were SaaS companies whose annual revenues were between $7.5M – $15M, over 60%.
  • The growth rate of SaaS companies surveyed whose revenues were in excess of $100M had a median growth rate of 28%.

SaaS Benchmarking Stats - Median Growth by Company Size

 


Go to Market Cloud Computing Research – SaaS Industry Metrics – Sales & Marketing Costs

  • CAC Composition: Sales vs. Marketing Cost % of CAC
  • Overall, the median company in the survey devoted 30% of their CAC to marketing expenses, with the balance (70%) allocated to sales. However, ecommerce driven companies have a much greater reliance on marketing and those companies spent 65% of the median company’s CAC budget on marketing.

    SaaS Benchmarking Stats - Sales & Marketing Cost

     


Go to Market Cloud Computing Research – SaaS Industry Metrics – Spending Levels & Growth Rates

  • Sales & Marketing Spend & The Corresponding Growth Rates (Excluding Companies with less than $2.5M in annual revenue)
  • Based on the survey respondents, there was a clear correlation between sales and marketing spend and the overall growth rate of the company.

    SaaS Benchmarking Stats - Spend & Growth


Go to Market Cloud Computing Research – SaaS Industry Metrics – CAC Ratio Detail

  • CAC Ratio on New Customers vs. Up-sells vs.Expansions vs. Renewals – excluding SaaS companies with annual revenues below $2.5M
  • Median $1.13 (range spans from $0.98 to $1.38
  • Approximately half of the survey of respondents spent $.75 – $1.50 to generate $1 of new ACV

SaaS Benchmarking Stats - CAC Ratio

 


Go to Market Cloud Computing Research – SaaS Industry Metrics – CAC Ratios

  • Excluding SaaS companies with less than $2.5M in annual revenues, the median CAC spend was $1.13

 

SaaS Benchmarking Stats - CAC Ratio Detail

 


Go to Market Cloud Computing Research – SaaS Industry Metrics – Contract Size

  • Excluding SaaS companies with less than $2.5M in annual revenues, the median growth rate for SaaS companies surveyed was 35%.  Below is the detail of growth rate by company size.

SaaS Benchmarking Stats - Contract Size

 


Go to Market Cloud Computing Research – SaaS Industry Metrics – Contract Size

  • Excluding SaaS companies with less than $2.5M in annual revenues, the median growth rate for SaaS companies surveyed was 36%.  Below is the detail of growth rate by target customer.

SaaS Benchmarking Stats - Target Customer Size

 


Go to Market Cloud Computing Research – SaaS Industry Metrics – Up-sells & Expansion Revenue

  • Based on the SaaS companies surveyed, 15% of new ACV was derived from up-sells and expansion sales.
  • In general, there was a direct correlation between annual revenues of the SaaS companies surveyed and the contribution from up-sells and expansion sales (exception of companies with revenue greater than $75M annually).
  • SaaS Benchmarking Stats - Up-sells & Expansion

Go to Market Cloud Computing Research – Gartner Says $111B In IT Spend Will Shift To Cloud By 2020

Gartner expects that more than $1T in IT spending will be directly or indirectly affected by the shift to the cloud by 2020.

By 2020, Gartner expects that 43$ of Business Process Outsourcing spending and 37% of application software spending will shift at will shift to the cloud .

Go to Market Cloud Computing Research - Cloud Spending by Software Segment

 

What’s driving the shift in IT spending towards the cloud?

  • Supporting new business models
  • Revamping business processes to be customer focused
  • Staying in step with how customers are changing where and how they buy

 

Go to Market Cloud Computing Research - IT Spending ShiftKey takeaways:

35% of theBusiness Process Outsourcing IT spend, or $42B, or 35% of the total market, is forecast to shift to the cloud this year

25% of the Application Software spending, or $36B, is predicted to shift to the cloud this year

Gartner expects that the most significant shifts in IT spending to the cloud include Business Process Outsourcing (BPaaS) and application software.

Gartner expects 43% of all IT spending on Business Process Outsourcing (BPaaS) to be cloud-based through the forecast period (2020).

Gartner expects 37% of application software spending will shift to the cloud

10% of application infrastructure software is expected to shift to the cloud by 2020

Source: Gartner


Go to Market Cloud Computing Research – Gartner Says by 2020 “Cloud Shift” Will Affect More Than $1 Trillion in IT Spending

In Gartner’s Go to Market Cloud Computing Research, the expectations is that more than $1T in IT spending will be impacted by the cloud by 2020 and that should benefit startups that are built from the cloud up.

Gartner expects at least $1 trillion in IT spending to be impacted over the next five years as enterprises move to the cloud.  The absolute dollar amount is stunning and could therefore be considered one of the most disruptive forces of IT Spending.

The adoption of cloud computing has moved to the mainstream market (early majority) and it represents a significant percentage of total IT spend.

Go to Market Cloud Computing Research - Gartner Shift From Traditional IT Spending to Cloud SpendingIn the Market Insight: Cloud Shift — The Transition of IT Spending from Traditional Systems to Cloud there is a more detailed analysis.  The press release can be found at here >>


Go to Market Cloud Computing Research – Cloud Market Segments

Below are some highlights from the report.

Go to Market Cloud Computing Research - Gartner Cloud Shift Spending Summary by Market SegmentGo to Market Cloud Computing Research – Legacy Segments: Business Process Outsourcing

  • Cloud Segment: BPaaS
  • Total market size in 2016: $119B
  • Total cloud shift in 2016: $42B
  • Cloud shift rate through 2020: 43%
  • Cloud Segment: SaaS
  • Total market size in 2016: $144B
  • Total cloud shift in 2016: $36B
  • Cloud shift rate through 2020: 37%

Go to Market Cloud Computing Research – Legacy Segments: Application Infrastructure Software

  • Cloud Segment: PaaS
  • Total market size in 2016: $177B
  • Total cloud shift in 2016: $11B
  • Cloud shift rate through 2020: 10%

Go to Market Cloud Computing Research – Legacy Segments: System Infrastructure

  • Cloud Segment: IaaS
  • Total market size in 2016: $294B
  • Total cloud shift in 2016: $22B
  • Cloud shift rate through 2020: 17%

IT spending is steadily shifting from traditional IT offerings to cloud services (cloud shift)

The aggregate amount of cloud shift in 2016 is estimated to reach $111 billion, increasing to $216 billion in 2020.

Enterprises are pursuing a new IT architecture and operating philosophy as they become prepared for new opportunities in digital business

Enterprises that embrace dynamic, cloud-based operating models position themselves better for cost optimization and increased competitiveness


Go to Market Cloud Computing Research – Pacific Crest 2015 Private SaaS Company Survey: Summary of Results

This Pacific Crest 2015 Private SaaS Company Survey provides insights into private SaaS companies and it is the sixth such survey Pacific Crest has completed.

Go to Market Cloud Computing Research – Pacific Crest Key Takeaways

  • The median revenue growth achieved in 2014 was 44%, while the median projected growth for 2015 is 46%.
  • Median 2015 GAAP Rev Growth ~ 36%
  • Median growth among field sales dominated companies slightly lagged inside sales dominated companies (by 6% points), but led internet sales by 8% points
  • Field sales remains the most common distribution channel (41%) – 32% if companies with <$2.5MM in revenues are excluded
  • Analyzed by contract value, field sales dominates for companies with median deals over $50K
  • Among companies selling $15K-$50K ACV
    • Larger companies tended to favor field
    • Inside sales driven companies had slightly higher efficiency, as reflected in $/FTE, however CAC, S&M expense ratios and growth were virtually identical
    • Gross churn was higher for inside, but net dollar retention was also higher, suggesting more success with “land-and-expand”.
  • Respondents (excluding the smallest companies) spent a median of $1.18 to acquire each dollar of new ACV from a new customer. The result drops to $1.06 if companies with <$2.5MM in revenues are included
  • The median CAC per $1 of up-sells is $0.28, or about 24% of CAC to acquire each new customer dollar. The CAC for renewals is $0.13, or 11% of the CAC to acquire each new customer dollar
  • Field sales has the most expensive CAC at $1.14, followed by inside sales at $0.90. Channel and online distribution have significantly lower CACs at $0.66 and $0.42, respectively
  • Overall, the median company devotes 31% of their CAC to Marketing expenses, with the remaining 69% allocated to Sales. However, Inside Sales- and Internet Sales driven companies have a much greater reliance on Marketing, with 38% and 65% of their CAC budgets devoted to Marketing, respectively
  • Field Sales dominated companies have 20% longer CAC payback periods than those primarily using Inside Sales, which in turn have approximately 20% longer CAC payback periods than those relying primarily on Internet Sales
  • The median respondent gets 16% of new ACV sales from up-sells; larger companies rely more heavily on up-sells
  • Median subscription gross margins are 78%
  • Approximately 30% of companies derive some amount of new ACV from “freemium” strategies, though virtually no one drives their business on it. “Try Before You Buy” is much more commonly used: 60% derive revenues through this strategy, and 30% derive the majority of their new ACV through “Try Before You Buy”.

Go to Market Cloud Computing Research - Pacific Crest 2015 Private SaaS Company Survey: Summary of Results

Go to Market Cloud Computing Research – Survey Sample

  • Responses from senior executives at 305 companies
  • 133 companies with greater than $5M
  • 57 companies with greater than $25M
  • 70% of participants headquartered in the U.S.
  • $21K median annual contract value (ACV)

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