WW Cloud Services to Surpass $109 Billion in 2012

The public cloud services market is forecast to grow 19.6% in 2012 to
total $109 billion worldwide, according to Gartner, Inc. in a report
entitled Forecast Overview: Public Cloud Services, Worldwide, 2011-2016,
2Q12 Update.

Business process services (also known as business process as a service,
or BPaaS) represent the largest segment, accounting for about 77% of the total
market, while infrastructure as a service (IaaS) is the fastest-growing segment
of the public cloud services market and is expected to grow 45.4% in 2012.

"The cloud services market is clearly a high-growth sector within
the overall IT marketplace," said Ed Anderson, research director at
Gartner. "The key to taking advantage of this growth will be understanding
the nuances of the opportunity within service segments and geographic regions,
and then prioritizing investments in line with the opportunities."

BPaaS is the largest segment primarily because of the inclusion of
cloud advertising as a subsegment. BPaaS is forecast to grow to $84.2 billion
in 2012, up from $72 billion in 2011. In 2011, cloud advertising represented
about 47% of the total public cloud services market, making it the biggest
identifiable subsegment in the forecast. Through 2016, cloud advertising will
continue to account for about 47% of total public cloud services spending.

Software as a service (SaaS) is the next-largest segment and is
forecast to grow to $14.4 billion in 2012, while IaaS is forecast to grow from
$4.3 billion in 2011 to $6.2 billion in 2012. In 2010, the IaaS market was less
than one-third the size of the SaaS market. By 2016, the IaaS market will grow
to almost equal the size of the SaaS market.

Growth in application infrastructure services (also known as platform
as a service, or PaaS) will also be high, although it is a smaller market
relative to the other segments. PaaS is strategic and considered to be a
critical growth driver for other segments, including BPaaS and SaaS. The PaaS
segment is forecast to grow to $1.2 billion in 2012. Cloud management and
security services constitute a new forecast segment comprising cloud security
services, IT operations management (ITOM) and storage management (including
backup and recovery services). The cloud management and security services
segment is forecast to grow to $3.3 billion in 2012.

Although North America is the largest region and is expected to produce
the largest absolute increase in market size, Gartner expects the highest
regional growth rates in emerging Asia/Pacific (including India and Indonesia),
greater China, Eurasia (including Russia) and Latin America (including
Argentina, Mexico and Brazil).

Western Europe is forecast to grow the slowest during the forecast
period, largely due to ongoing eurozone economic issues, while growth will also
be lower in mature Asia/Pacific markets due to ongoing economic challenges in
the Japanese market.

North America will account for the greatest percentage of absolute
growth in the cloud services market, with 61% of all growth from 2010 through
2016. Western Europe will follow, with 17% of absolute cloud services growth
over the same period. This highlights the dominance of North America and
Western Europe in the development, availability and adoption of cloud services.

High growth rates will occur in emerging markets, including the top
three growth countries of India, Indonesia and China. However, 79% of spending
increases will come from North America and Western Europe. For cloud services
providers, this will require a strategic approach when considering both
high-volume and high-growth markets. Both will be important in the development
of sustained, global strategies.

"The total public cloud services market size in 2011 was $91.4
billion, and it will grow to $206.6 billion in 2016. As the market grows, IaaS
will become a larger part of the overall market, while the market share of
cloud management and security services will grow as well," said Anderson.
"When targeting specific markets within the cloud services marketplace, we
recommend evaluating both potential market size and growth rates. These will
vary by segment, sub-segment, region and country."