Channel Partners

SPR 2015

For 25 years, Channel Partners has been a resource for indirect sales channels, such as agents, VARs and dealers, that provide network-based communications and computing services, associated CPE and applications, and managed and professional services

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6 CHANNEL PARTNERS SPRING 2015 FEATURE MAR/APR 2014 If you look at virtually any B2B IT publication, listen to exec- utives or read the analysts, you'd think that cloud services are it and only it. Judging by the coverage, those much- discussed cloud services must by now amount to the better part of the IT market, with rest of the market dying a slow and predictable death. Must be, right? Wait. What Cloud? Whatever you guessed about the size of the cloud market, we're willing to bet that you didn't peg cloud spending at just 3 percent of the total global IT market. A few points here. First, there's more cloud-related spending going on in the U.S. than in other parts of the world, but even if all of it happened in the U.S., it would still account for less than 8 percent of the U.S. spend. Second, the Forrester cloud numbers do not include cloud-enabling technology — for example, when businesses need to increase private or Internet bandwidth to accommodate cloud services. That increase goes elsewhere in the Forrester stats. Also, if a business decides to give all of their staff tablets or Chromebooks and to do a bunch of training on cloud systems, those costs also get accounted for elsewhere. And when it comes to integrating all those SaaS apps — well, that cost goes elsewhere too. The point we're making here is that if you feel like your customers simply aren't interested in jumping onto the cloud bandwagon in a big way (at least not yet), you aren't wrong. This is the sort of hype that our industry goes through. Something like 90 percent of the press goes to 10 percent of the stuff that's going on in our industry. Wrong. The data, such as it is, tells the story. The numbers from the analysts are all over the place, but just for consistency, we'll stick with Forrester Research — and look strictly at the market size number. In 2013 Forrester pegged the total worldwide IT marketplace at $2.1 trillion for the year, with the U.S. accounting for about 40 percent of that. Of the $2.1 trillion, software is the biggest chunk at $542 billion, then comes computer equipment at $404 billion, IT outsourcing and hardware maintenance at $411 billion, IT consulting and integration services at $389 billion and communication equipment at $322 billion. So what fraction of that is cloud computing? In 2013 Forrester set the global public cloud at $58 billion, growing to $160 billion in 2020. This year the 2020 number has been revised up to $190 billion. The 2013 number breaks down this way: business process-as-a-service at $1.26 billion, SaaS at $47.2 billion, PaaS at $4.38 billion and IaaS at $5 billion. The rise since then has been proportional across these areas. The 2015 number is expected to be just under $100 billion. CLOUD SERVICES: From Aspirational to Operational By Art Wittmann

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