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Platform clouds generating more noise than cash

All the action is in SaaS and IaaS – and advertising

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There's a lot of talk about infrastructure and platform cloud services, but thus far the cloud biz is a relatively small portion of the $3.6 trillion in global IT spending. But its share is growing fast, and that has a lot of people excited and waving their hands a lot.

The prognosticators at Gartner are among the hand wavers. The company just released some statistics and projections for platform cloud service revenues this year and out into the future that look very encouraging indeed.

Gartner's wizards of cloud are projecting that platform cloud services (and this means public cloud as well as your own private cloud running the same software if it is available for internal consumption, which for the most part these days it is not) will account for $1.2bn in revenues worldwide, up 30 per cent from the $900m a year ago that PaaS cloud generated. The growth will hold more or less steady in Gartner's projections, with platform cloud revenues worldwide hitting $2.9bn by the end of 2016.

Amazon, Google, Microsoft, Salesforce.com/Heroku are the biggies, but VMware is coming on with its Cloud Foundry and server makers like Hewlett-Packard and IBM are ramping up their infrastructure clouds and fluffing up platform services atop them. There are smaller players like Red Hat, Engine Yard, and SkyTap that will get more traction as time goes by, too, and others will no doubt join the fray, trying to exploit our laziness or lack of skills in managing hardware and software infrastructure for a fee.

But clearly, we are not very lazy at all if we are talking about platform cloud revenues being a minuscule fraction of overall IT spending. Maybe only the newbie startups take the easy way out with platform clouds.

The acronym police were on holiday at Gartner when this latest report was written, with the market analysts subdividing the platform cloud biz into a variety of awkwardly named sectors.

Application platform services (aPaaS) will account for 34.4 per cent of total PaaS spending in 2012. Application life cycle management services (almPaaS) will generate 12 per cent of the total, followed by business process management services (bpmPaaS) at 11.6 per cent and integration services platform clouds (iPaaS) at 11.4 per cent.

Gartner did not provide any information about database and Hadoop platform cloud services, but these clearly exist and will be popular within the PaaS universe, but likely dwarfed by physical or virtualized servers running databases or Hadoop the old fashioned way as an application, not a service with limited inputs for ease of use.

Companies in the US will drive 42 per cent of that $1.2bn in PaaS revenues this year, with Western Europe, Japan, and Australia/New Zealand driving the bulk of the rest. Nearly 90 per cent of that PaaS revenue will come from established economies, according to Gartner.

The platform cloud dicing and slicing released today by Garter follows a broader cloud report released in September that pegged the overall cloud services market worldwide at $109bn this year.

The thing to watch in that number is that Gartner puts all of that online advertising that pays for the Internet to exist in there, accounting for 47 per cent of the total cloud services revenues this year and out through 2016. The larger business process as a service (BPaaS) segment will drive $84.2bn in revenues this year, says Garter, and advertising as a service (oddly enough, which Gartner did not abbreviate AaaS, as in kiss it) will be $51.2bn of that.

Gartner thinks that software as a service (SaaS) will rake in $14.4bn this year, while raw infrastructure as a service (IaaS) will post something on the order of $6.2bn in revenues, up 44 per cent and growing fast enough that by 2016 Gartner reckons that SaaS and IaaS will have slices of the cloudy services market that are just about the same size. Management tools and security services that are clouded up and sold as a service are forecast to push $3.2bn in sales this year. ®

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