Product Management :: Product Marketing

03 May, 2011

Amazon's outage questions Forrester's explosion in cloud usage

Amazon Web Services, the pin-up of the cloud industry, suffered a serious outage (read The Register coverage: Amazon: Some data won't be recovered after cloud outage).

Four days later (with Amazon struggling to put everything back in place), Forrester Research publishes an optimistic report entitled, Sizing the Cloud, about SaaS usage.

Here are some quotes taken from SaaS spending to rocket in next five years:
  • Revenues from SaaS will increase from $21.2bn today to $92.8bn in 2016, by which point SaaS will account for roughly 26 per cent of the packaged software market.
  • After 2016, however, the market will come closer to saturation, and SaaS growth will be far less impressive between 2016 and 2020.
  • Revenues from SaaS will help the global market for all types of cloud services increase from $40.7bn in 2011 to $241bn in 2020. 
  • However Forrester analysts predict that not all cloud-based services will see uninterrupted revenue growth to 2020: The infrastructure as a service (IaaS) market [Arthur: ie Amazon Web Services) is expected to grow from $2.9bn to $5.9bn between 2011 and 2014, before shrinking to $4.8bn in 2020.
Competition in the IaaS space is intense, with over capacity and competition driving down costs leaving only those with massive scale (eg Rackspace) with the deep pockets and the clout to compete.

Continued differentiation in IaaS and SaaS is essential.

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