Small Business Apps And The Future Of The Clouds
small business Cloud IT future

Pay attention to what apps the Millennials are using and see what applies.


Cloud computing, while a hot topic, is still immature and consumes a small percentage share of the overall IT spending.

Thus, there is tremendous room for growth and it is likely that in 10 years the top 10 players may not be the same ones as today. Small business and IT executives can expect to see strong growth in the sector with new entrants constantly popping up and older cloud service providers (CSPs) maturing, merging, and/or ceasing operations if they fail to remain competitive.

The top cloud player

The top cloud player today, Amazon Web Services, generated $7.88 billion in revenues. They are the 800 lb. gorilla in today’s market, with Google, IBM, and Microsoft working hard to catch up.

These top four players controlled 54 percent of the market in 2015 with about $20 billion in total revenues.

However, there is a caveat: none of the firms report their cloud revenues the same way so it is hard to really determine true cloud services revenues versus other products and services derived from cloud computing. Nonetheless, this total market revenue stream is less than the annual revenues of any of those vendors and is a small share of the 2015 $3.5 trillion IT market.

Cloud Trends

There are two ways to slice the cloud market – by offering type (SaaS, IaaS, PaaS, etc.)  and by private, public or hybrid clouds. In the small business space the vast majority of companies have deployed hybrid clouds or just public clouds. Very few have private clouds only.

This trend is expected to hold over time with the number of private cloud instances shrinking. In the large enterprise space, there are more private clouds existing. Many analysts project that this will shrink over time but there are a number of variables that could prevent this from happening. However, it is the public cloud sector that most SMB executives think about when asking about trends – so that will be our focus.

The markets that get the most mention

The markets that get the most mention in the news are the Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) cloud segments. These are the ones dominated by the top four players. But as a percentage of the cloud market they represent less than 50 percent of the market.

Furthermore, the growth of the IaaS and PaaS sectors will collectively be less than half that of the SaaS (Software-as-a-Service) segment.

Thus, as we look out over the next decade the SaaS sector could expand to encompass 75 percent of the market.

Amazon, IBM, VMware, Google, EMC and Dell

In the non-SaaS public cloud space it is highly probable that the top four players will hold onto these slots as the markets grow.

Amazon is very customer focused and works closely with customers to make sure they remain the vendor of choice for services they provide. It will be very tough for a competitor to pull it off of the top perch. Microsoft is betting it can get all of its customers to shift from the on-site software acquisition model to its public cloud usage model.

This strategy is working and the company can be expected to deliver more tools and integrated approaches (along with acquisitions) to keep winning over converts to its cloud model. Google is still new at this but is now very focused on being successful in this business.

This makes the odds of Google staying in the top tier quite high. IBM hopes to use its deep customer base and knowledge of cognitive and enterprise systems to become one of the top three over time. While this is a stretch, it is one of Big Blue’s strategic initiatives and it is beginning to show signs of working.

One can also add VMware to the mix, as it seeks to transform itself from just a virtualization player into a cloud player. It is off to a decent start but its success may be impaired by the planned acquisition of its parent EMC into Dell.

Next- Application consolidations and Summary


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