Rationale in irrationality – The coming of cloud bust?


Any technology, product, or service can become so popular that it develops a trendiness, in which case it becomes difficult to determine if the tool actually has its perceived value or is causing overzealousness in the market. Cloud computing has the huge visibility that could allow it to become an overvalued product, which could allow industry analysts to think it will expand more rapidly than it actually will. This article explores the current industry growth rate projections for the cloud and signs that these growth rates could begin to slow in the years ahead.

The numbers: how fast is cloud growing?

For many reasons, businesses are turning toward the cloud. One key one is that a greater understanding has developed that the security of cloud is preferable to the security of on-premise architecture.

For all the reasons that organizations are deciding cloud is the right choice for them, the market is certainly expanding. A Gartner forecast released in October projected that the cloud market was expanding rapidly, particularly in the area of cloud hosting, which is technically called infrastructure-as-a-service, or IaaS (in contrast with other primary cloud service categories platform-as-a-service, or PaaS, and software-as-a-service, or SaaS). There are also many other types of as-a-service solutions (disaster-recovery-as-a-service, or DRaaS, for instance), but those other types of products fall under one of the primary categories of service – IaaS, PaaS, or SaaS.

Gartner projected that IaaS would expand at a compound annual growth rate (CAGR) of 23.31% through 2020. The analyst’s estimate suggested that cloud would hit $260.2 billion for 2017, representing a rise from $219.6 billion in 2016.

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