Global cloud market to top $241bn by 2020

A detailed analysis of the future of the global cloud market predicts that the value of such systems will hit $241bn by 2020, up from around $40bn today, and that software-as-a-service (SaaS) revenue will lead the way.

SaaS accounts for around half of the total value of the current market, according to new figures from Forrester Research, but growth will peak by 2016 and then grow more slowly.

The market for infrastructure-as-a-service is growing strongly, led by companies like Amazon and Rackspace, but will peak early at $5.9bn in 2014 and then decline as price competition and commoditisation erode values.

Meanwhile, the platform-as-a-service and business process-as-a-service sectors will show initial growth and then mature quickly, with small but significant market shares, according to Forrester.

Such rapid change means that companies need to sort out their strategy before committing to cloud service models, and should be reactive to new business models.

"Vendor strategists should not get carried away by lofty market expectations. Some cloud markets will face significant commoditisation, other markets are still very young with low market adoption," the analysts warned.

"As several cloud markets are growing by cannibalising existing markets, vendors also need to consider the relationship of their new cloud activities with their current business model."

Economic uncertainty is helping to drive the cloud market, Forrester said, since companies want the agility and flexibility that such services provide.

Cost savings will also be important, but the flexibility of cloud services for staff is just as vital, the report concludes.