When we look at market figures for cloud growth, we generally consider the three main categories of Software as a Service (SaaS), Infrastructure as a Service (IaaS) and Platform as a Service (PaaS).
According to IDC’s latest report “Worldwide Public Cloud Services Spending Will More Than Double by 2023”*, SaaS will be the largest category of cloud computing, capturing more than half of all public cloud spending in throughout the forecast.

PaaS is the lowest spending category of the three today, however has a five year growth compound annual growth rate (CAGR) of 30%, with PaaS spending led by the need for data management software, application platforms and integration and orchestration middleware.

That is not really surprising, however what some readers may find more surprising is that private cloud is forecast to quadruple over the same period. Grandview Research predicts global private cloud spending to grow from $40bn now to around $183bn by 2025.

Private cloud is now growing much faster than public cloud. 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. 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.  However, just focusing on the cloud income split we can see from the figures 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 this revenues will come from the public cloud data centres, which is estimated to continue to grow at a more modest 6% CAGR.

However, revenues from private cloud infrastructure is expected to grow at a much larger rate of over 9% CAGR over this period.

What is the difference between public and private cloud?public and private cloud both are different to each other. Some analysts are referring to this trend as a ‘resurgence’ of private cloud.  I personally think private cloud has just gone in and out of favor over the years, especially when compared to the much bigger public cloud. In my experience from working in the cloud market over the last ten years, it was really around 2015 onwards (which is about the time Microsoft were massively expanding their worldwide Data Centres footprint and opening up their Azure services to new markets), that public cloud started its recent boom.

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

However, 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 time. 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 infra-structure that has fuelled the public cloud boom over the last five plus years. However, concerns with security, Disaster Recovery and a growing mobile workforce having BYOD needs, are all key factors for 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 and I believe 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.

Grandview Research Oct 2019 
IDC July 2019
IDC Jan 2020
Gartner Feb 2019