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Report: Cloud to Expand at CAGR of 36 Percent through 2016

The ongoing demand for Infrastructure as a Service (IaaS) and other cloud solutions suggests that businesses are in constant need of IT platforms that promise to deliver unique growth and performance opportunities. The pressure to innovate has encouraged enterprise executives to pursue the cloud with newfound enthusiasm, pushing the overall market to new heights.

Market Monitor, a service of 451 Research, recently announced its predictions for the growing cloud computing industry, noting that analysts believe it will expand at a compound annual growth rate (CAGR) of 36 percent through 2016, at which point it will generate nearly $20 billion in revenue.

"Cloud computing is on the upswing and demand for public cloud services remains strong," said Yulitza Peraza, analyst for quantitative services at 451 Research.

Peraza noted that although there are still some hurdles companies must overcome when initially adopting the cloud, the overall need for the hosted services in the enterprise will continue to grow in the coming years. This trend will largely be driven by the growing need to stay competitive in an increasingly crowded business landscape.

Infrastructure services are bound to dominate
Although Software as a Service (SaaS) and Platform as a Service (PaaS) are currently popular in the enterprise, the individual market for cloud infrastructure solutions is positioned to flourish in the future. Analysts noted that IaaS accounted for the majority of the industry in 2012 and is forecast to expand at a CAGR of 36 percent through 2016.

A separate VMware study found that more than two-thirds of organizations are now running what they view as mission-critical processes in IaaS environments.

"The study demonstrates that IaaS from cloud service providers is seeing broad adoption by mainstream business for business-critical applications and data, moving beyond test and development," said Mathew Lodge, vice president of cloud services at VMware.

By implementing highly compatible and reliable cloud infrastructure services, enterprises around the world can ensure they have the IT architecture resources they need to support a broad range of complex operations that otherwise could have put too much pressure on traditional environments. Meanwhile, the inherent cost-effectiveness of the cloud is allowing organizations to guarantee all IT procurement and deployment projects stay within specific financial parameters.

As the overarching cloud landscape matures, more companies will be lured into the IaaS market by the prospective benefits that come along with using hosted infrastructure solutions. Planning ahead and working with a trusted provider will ensure these initiatives are consistently successful.

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