Public cloud spending continues to grow, with IDC estimating that the global market will double to around $500bn by 2023. That may not be surprising to you, but you may be surprised to learn that private cloud is forecast to quadruple over the same period, with Grandview Research predicting that global private cloud spending will grow to around $183bn by 2025.

private cloud server market size

U.S. private cloud server market size, by hosting type, 2015 2025 (USD Billion) | Source: www.grandviewresearch.com

If you compare the compound annual growth rates (CAGR) of both, private cloud growth is estimated to be around 30% compared to just over 20% for public cloud over the next five year period.

This trend comparison is also verified in the vendor income forecasts and IDC track the global vendor revenues for IT infrastructure (servers, enterprise storage and Ethernet switches) which includes all equipment sales made to on-premises as well as all types of cloud.  Interestingly the balance has only just tipped recently with cloud infrastructure income now exceeding income from non-cloud IT Infrastructure.

If we focus just on the cloud income split, however, we can see that revenues for all types of cloud IT infrastructure are predicted to steadily grow over the next five years with an average CAGR rate of 7%.  Two thirds of these revenues will come from the public cloud data centres, which is estimated to continue to grow at a more modest 6% CAGR, but revenues from private cloud infrastructure are expected to grow at a much larger rate of over 9% CAGR over this period.

Whilst some analysts are referring to this trend as a ‘resurgence’ of private cloud, I think private cloud has just gone in and out of favour over the years, especially when compared to the much bigger public cloud.

From my experience of working in the cloud market over the last ten years, it was from around 2015 onwards that public cloud started its recent boom – about the time Microsoft were massively expanding the worldwide footprint of their Data Centres and opening up their Azure services to new markets.

Public cloud really raced ahead of private cloud with very rapid growth that has made it five times the size of the private cloud market.

As we can see from the analyst projections, private cloud is now expected to enter into its own rapid growth period with quadruple global market size in five years. There are several reasons for this, however Grandview Research articulates these reasons well by highlighting that private cloud delivers all the benefits of public cloud but with added data security and privacy protection. Organisations were quick to adopt the benefits of public cloud with mass take up of commodity cloud-based infrastructure, fuelling the boom.

Concerns with security, Disaster Recovery and a growing mobile workforce having BYOD needs, are all key factors as to why organisations are now looking at including private cloud as part of their portfolio mix.

This approach sits well with Gartner’s multi-cloud strategy.

Another reason for the large private cloud growth is about organisations spreading risk, a portfolio type approach. Multi-cloud strategy is not just about choosing ‘multiple vendors’, it can also include ‘multiple types’ of cloud i.e. including both private and public cloud to deliver their apps and workloads.

Being able to use the most appropriate cloud option enables you to deliver resource and cost-optimised solutions, as well as a reduction in vendor tie-in and improving scalability and agility. Opal Wave has just released a new guide, which takes you through the options of private and public clouds, PaaS and SaaS, according to your needs. 

This is adapted from an article originally published by David Penny, Cloud Services Director at Opal Wave, on LinkedIn.