End users remain focused on internal cloud initiatives
NEW YORK, USA: Market Monitor, a service of 451 Research, projects that the cloud-enabling technologies market revenue will increase at a 21 percent CAGR to reach $22.6 billion in 2016.
Full report highlights include:
* Virtualization - the foundation of cloud computing - accounts for the majority of total market revenue, with a 66 percent share. But, as the most mature market segment, it also has the lowest CAGR through 2016 (16 percent).
* Automation and Management, a broad category that includes incumbent technologies and cloud platforms, will continue to grow at a healthy 28 percent CAGR as users move up the stack from first-tier virtualization implementation.
* At the top of the stack is security, with no single vendor dominating. This sector has the highest CAGR through 2016 at 29 percent.
* Since September 2012, there have been 12 significant acquisitions in the CET space. Going forward, we expect to see more of the same as firms look to either bulk up their cloud offerings or make an initial 'roll of the dice' in the cloud market.
* Revenue generated by public firms accounted for 87 percent of the total, with private firms accounting for the remaining 13 percent.
* Public vendors accounted for 21 percent of the total companies in the CET space, with private vendors accounting for 79 percent.
* A smaller percentage of companies are generating less than $5 million in revenue than the year before: nearly half of the vendors in 2012 generated less than $5 million in revenue (44 percent), compared with 58 percent in 2011. Roughly one-third of vendors fall into the midmarket range (defined as $5 million-$25 million), up from 27 million in the midmarket the year before. Only six vendors have revenue (deriving strictly from CET) over $500 million.
"The drivers of growth are twofold," said Victoria Simons, Research analyst, 451 Research. "Initial adoption of the cloud is driven by the need for cost reduction and more efficient computing options. As the infrastructure is virtualized, customers then need tools to manage, control and secure their IT environments to fully realize the benefits of virtual/cloud environments. We see the cloud-enabling technologies market growing strongly as large enterprises and SMBs continue along the path of flexible computing."