Hosted private cloud market to reach $24 billion in 2016

As decision-makers increasingly turn to cloud computing to improve operations and reduce expenses, they are becoming confident in the technology and are investing more into the services. In fact, many executives are moving away from the public cloud and leaning toward developing more personal, user-defined solutions that cater to the unique demands of a single organization.

This rising demand for the private cloud was highlighted in a recent report by IDC, which forecasted the market for hosted private cloud services to expand at a compound annual growth rate of more than 50 percent between 2012 and 2016, eventually generating approximately $24 billion in revenue. Analysts said the rapidly evolving private cloud will become the new backbone for the private sector, providing organizations with new ways to leverage advanced infrastructure solutions.

IDC said hosted private clouds are a blend of two private cloud models: dedicated and virtual offerings. The dedicated private cloud provides decision-makers with 1:1 computing and storage services catered to meet the needs of a specific organization. The virtual private cloud, on the other hand, is often seen as an addition to the public cloud because it provides firms with shared assets, though it has a range of more robust security and user control options than most public cloud offerings.

"IDC anticipates that virtual private cloud will be the predominant operational model for companies wanting to take advantage of the speed and lower capital costs associated with cloud computing while cloud service providers will welcome the move away from the expense of dedicated 1:1 physical systems for delivering their business process and data center outsourcing and other services," said Robert Mahowald, research vice president of SaaS and cloud services at IDC.

Analysts noted that the virtual private cloud is likely to gain significant momentum in the coming years because decision-makers throughout the private sector are interested in leveraging advanced cloud infrastructure offerings. A study by a major cloud services provider highlighted the fact that more than two-thirds of companies are using hosted infrastructure to run mission-critical workloads, giving them more flexibility and scalability when needed.

As businesses around the world strive to gain a competitive advantage, the cloud will be more widely incorporated into a broader range of enterprise strategies. By leveraging private cloud offerings, decision-makers can make full use of the cloud with the model's robust management capabilities.

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