The public cloud has been growing at 30% or more for almost a decade. Even during the pandemic when budgets were tight, public cloud use accelerated. In the coming years, growth will be tougher because the four biggest public cloud providers are competing fiercely. They are investing a lot of money in analytics, artificial intelligence, machine learning, and other services to stay ahead. Even though it will be more difficult, the public cloud market will continue to grow.
According to the latest report by Forrester, the public cloud market will cross $1 trillion worldwide by 2026. However, as this market develops, more moderate growth in public cloud usage will be affected by factors like competition among the biggest cloud providers as stated previously, market fragmentation due to regulatory and political disagreements, and vendors of edge computing devices getting a bigger share of IT spending than before.
Forrester predicts that cloud infrastructure services will bring in nearly $496 billion in revenue by 2026. This is because hyperscalers, which are large companies trying to dominate the public cloud and cloud services industries, are fighting the increased commoditization of infrastructure, as mentioned before.
Hyperscalers will increase investments in technologies like custom microchips and advanced wireless networking to keep up with competitors. However, this will be more of an opportunity for them to retain customers and shift them to higher-priced services rather than a key driver of revenue. To stay powerful in the public cloud market, hyperscalers and providers will need to focus on investing in other premium services that are different from what others offer.
Areas of focus for hyperscalers
Database and analytics due to customer demand for AI/ML
People want artificial intelligence (AI) and machine learning to help them be more innovative and efficient. This will cause database and analytics services revenue to increase three times to $89.5 billion by 2026. Cloud AI platforms will help these services make more money. Cloud-native technologies will become more important as they get infused into standards for AI/ML and Kubernetes becomes the default IT infrastructure standard for the cloud.
Development services that attract coders
Development services that attract coders will generate $51 billion in revenue by 2026. This growth will be fueled by factors such as serverless technology becoming integral to app development on cloud platforms, automation, and the integration of low code into cloud development.
Cloud applications enhancing SaaS offerings of hyperscalers
The cloud applications market is a category that is dominated by non-hyperscalers. This market will reach saturation at $397 billion by 2026. Even though the market is reaching saturation, hyperscalers will continue to focus on their SaaS offerings and being the best hosts for SaaS.
While the public cloud is growing rapidly and is expected to reach $1 trillion in value, there will be challenges along the way. These challenges as stated before include competition from other companies, geopolitical tensions, and economic difficulties. Despite these challenges, the public cloud is expected to continue to grow and dominate the IT market by 2026.
Source: Forrester
