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Cloud hosting vendors collect revenues of $148 Billion in 2016

Published: 05/01/2017 by Comments

Cloud hosting vendors collect revenues of $148 Billion in 2016

Although for some 2016 was a year that they are happy to leave behind, that was not the case for cloud vendors and operators, who hope for a continuation of last year’s revenue growth in 2017.

A newly published report by the Synergy Research Group shows revenue figures at $148 billion, for the four quarters up to the end of September 2016 – a 25 per cent growth in annual revenue.  The report reveals that the Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) segments’ performed best, with growth at 53 per cent.

Two further segments with less, but still significant growth, were hosted private cloud infrastructure services (with a 35% annual growth figure) and enterprise Software as a Service (SaaS), coming in at 34 per cent.

Dominating the IaaS and PaaS segments’ were Amazon Web Services (AWS) and Microsoft, with Rackspace and IBM at the forefront of hosted private cloud infrastructure. Salesforce and Microsoft lead the way in the enterprise SaaS section.

The Synergy report shows that in 2016 more was spent on cloud infrastructure hardware than on software, explaining that, “in aggregate cloud service markets are now growing three times more quickly than cloud infrastructure hardware and software”.

Synergy went on to express the fruitfulness of investments in infrastructure made by cloud service providers with CSP’s gaining close to $30 billion in revenue profits across IaaS, PaaS and private hosted cloud services – with an excess of $40 billion coming from enterprise SaaS.  In a statement by Jeremy Duke, Founder and Chief Analyst with Synergy Research Group’s, we were told, “we tagged 2015 as the year when cloud became mainstream and I’d say that 2016 is the year that cloud started to dominate many IT market segments. Major barriers to cloud adoption are now almost a thing of the past, especially on the public cloud side. Cloud technologies are now generating massive revenues for technology vendors and cloud service providers and yet there are still many years of strong growth ahead.”

Synergy goes on to say,

“UCaaS, while in many ways a different type of market, is also growing steadily and driving some radical changes in business communications.”

It was stated, in a report published recently by Gartner, that spending in IT (overall) is expected to be $3.5 trillion in 2017, with spending in IT services generally to achieve growth of 7.2 and 4 per cent.


Colette Lamb
News article by:
Colette Lamb

A business sector writer with over 15 years of experience working in the marketing, commerce and law sectors' internationally and in the UK. Interests include composing music and other creative communications such as art and dance therapy.



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