This young industry's future is looking bright
London, United Kingdom (PRWEB) October 06, 2012
The Cloud Computing industry has incredible growth potential as it is still in its infancy. Drivers of cloud computing are all things internet and internet-enabled. The adoption of a cloud-computing model is used for achieving economies of scale, enhancing information sharing speed and developing new services. In 2012-13, the industry is expected to generate £5.79 billion in revenue. This will be a 6.5% increase on the previous year, as the economy moves out of recession and recognition of the industry's merits grows. The low growth compares with expected annualised rate of growth of 0.6% over the five years through 2012-13. According to IBISWorld industry analyst Craig Shulman, ”the next five years will better represent the expansion expected in industry services, with forecast annualised growth through to 2017-18 in the double digits”.
Shulman adds, “two principle factors are expected to limit growth over the coming five years: concerns over security, and limited business capital expenditure”. Trust of the third party managing an entity's private data is at the forefront of security concerns. This trust issue is double barrelled: not only do cloud-computing users need to be convinced that their data cannot be accessed by the outside world, but also that the cloud operator does not use the information for undesirable purposes. Depending on the holding location of the data, which could be anywhere around the globe, the rules and regulations governing privacy may be different to what the client understands or expects. With these concerns still looming, and capital expenditure rates expected to perform poorly over the coming few years, industry growth will be limited.
One advantage of any online business is that the product or service on offer has a global reach. A cloud-computing operator is simply taking all their server rooms, cooling facilities, physical software goods and their updates, and making them available to anyone over an internet connection. Growth in the industry will therefore influence other industries, like those in computer equipment sales or internet service providers, which will need to provide adequate bandwidth for cloud-computing users.
Traditionally, data processing and hosting services has encompassed a wide range of activities, and so the level of market share concentration has been low. With the development of cloud computing, there have been a select few IT powerhouses forcing the industry into something very big, like Google and Microsoft; however, the potential market size is just too big to assume these major players' share of the market is strong. Hence, concentration currently remains low; at least until the companies have a better understood and established market. To get a better sense of operator dynamics as they currently stand, the average number of employees per business establishment is seven. Large establishments of 50 or more employees represent only 8.0% of the industry. However, these numbers may be a little skewed due to outsourcing, as some firms may have more employees overseas that are not included in the data for this industry.
For more information on the Cloud Computing industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
This industry includes companies that host computing applications or data processing activities online. Computing and computer-based application data are stored in a cloud and accessed online. Data processing services provide specialised reports from information supplied by the clients. Services can range from automated data entry to the processing of that data.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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