How Big Is The Cloud?

We work in an industry that thrives on data. Specifically, financial data. As in, how much are businesses spending on IT? The managed services profession went through many years of financial modeling darkness. Everyone seemed to know it was growing, but we didn't know how much or how fast.

While we have gotten a little better in predicting managed services market growth, we seem to be little better at predicting the size, rate of growth, or even the general shape of this thing we call cloud computing. Let's take a look at some data points and see if we can't make some sense of it.

Managed Services Hasn't Stopped Growing Since 2003

Since the DotCom years and 9/11 left their marks on the global economies, the managed services profession has been enjoying a very reliable trend line of growth since the latter half of 2003. Yes, there have been years of less growth than others, but growth is still growth.

Even during the tumultuous 2008-2010 economic crisis, MSPs reported solid opportunities, even as they were dealing with changing service product lines internally. Whenever there is uncertainty in IT, MSPs thrive. This is what MSPs do well, they solve problems involving IT and business.

MSPAlliance projected the managed services industry in North America to be generating approximately $154 billion in 2015. While this was only a North American projection, it represents a healthy industry, whose future was not always certain.

Cloud Computing Growing, But By How Much?

According to Gartner, global cloud computing is expected to rise 18% in 2017, reaching an estimated $246 billion in spending. According to IDC, cloud computing will increase by 24%, representing $122 billion. Why the big difference?

One of the reasons these numbers are so widely different is the lack of consistency in terminology. This inconsistency isn't just between competing analysis/research firms, it's a deep rooted inconsistency within the entire profession. For this reason, it has been (and will continue to be) difficult to accurately predict these types of global spending trends.

Well Charles, what are we supposed to do then if we can't rely on these spending forecasts?  First, I didn't say you can't rely on them. Just don't expect them to be hyper accurate. If you take two major analyst firms and they both say cloud is growing, then I'd say that's a good indicator of growth in cloud.

Where it becomes slightly more challenging is segmenting all the different subsets of cloud computing, where there seems to be even larger degrees of variance amongst the research community.

Back in the dark ages of managed services, when we didn't really know how much was being spent on MSPs, we all felt positive. MSP revenues were on the rise, vendors selling to MSPs were being funded, and customers were buying into the idea of IT outsourcing.

I feel somewhat the same about cloud computing. While cloud may be a delivery mechanism for MSPs, it is still an important subset of the IT channel. It is a useful marketing device, and it has served us relatively well since it's rise in popularity from 2008.

So, how big is the cloud? Who knows, as long as it keeps on growing.

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