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Infrastructure as a Service Driven by Small Business Market: In-Stat

By Rajani Baburajan
TMCnet Contributor

The worldwide Infrastructure as a Service (IaaS) market is set to grow to roughly $4 billion by 2015, according to a survey by In-Stat (News - Alert).

IaaS growth will primarily be driven by the small business market. Small business is likely to account for over half of the market in IaaS and software-as-a-service (SaaS (News - Alert)).

Thanks to the entry of new platforms for applications, such as Google Apps and Force.com, SaaS applications are gaining visibility among businesses to gain traction in the software market.

“Growth is expected in all public cloud service segments,” said Greg Potter, analyst at In-Stat, in a statement. “Many software-as-a-service (SaaS) applications have been around for a long time, but only now since the advent of entire platforms for applications, such as Google (News - Alert) Apps and Force.com, are these applications gaining the necessary visibility among businesses to gain traction in the software market.  Infrastructure-as-a-service is also gaining traction, especially in the small business market.”According to In-Stat, the growth of SaaS will be 142 percent between 2010 and 2015. The overall growth of public cloud computing (IaaS, SaaS, and PaaS) will be 153 percent from 2010 to 2015.

Small businesses, with 5-99 employees, are likely to be the fastest growing segment, growing from $2.5 billion by 2010 to $6.6 billion by 2015, according to the In-Stat research called “Cloud Computing and Managed Hosted Services: US Business Spending by Size of Business and Vertical, 2010-2015”

The top five vertical markets for IaaS in terms of 2011 market revenue will be hospitality and food, healthcare and social services, and retail trade.  The bottom five verticals will be mining, forestry, fishing, and agricultural services and utilities.

Recently, research firm AMI-Partners said that small and medium business spending in the U.S. on SaaS will grow significantly during the next five years. There will be a 25 percent CAGR in hosted business application services spending through 2014.