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Through 2014 Public IT Cloud Services Will Grow at More Than Five Times the Rate of Traditional IT Products, New IDC Research Finds

FRAMINGHAM, Mass., June 23, 2010 - Worldwide revenue from public IT cloud services exceeded $16 billion in 2009 and is forecast to reach $55.5 billion in 2014, representing a compound annual growth rate (CAGR) of 27.4%, a newly published International Data Corporation (IDC) document finds. This rapid growth rate is over five times the projected rate of growth for traditional IT products (5%). This research further illustrates that public IT cloud services are crossing the chasm with modest revenue, but very fast growth.

"For vendors, cloud computing is critically important for two key reasons - market growth and leadership disruption. The cloud model will propel IT market growth and expansion for the next 20 years and will help the industry to more rapidly develop and distribute a new generation of killer apps, and to more successfully penetrate small and medium-sized businesses. As this happens, industry leadership ranks will certainly change," stated Frank Gens, senior vice president and chief analyst at IDC. "Additionally, our research with many CIOs about their plans for adopting cloud computing shows that IT customers are excited about the cost and agility advantages of cloud computing, but they also have serious concerns about the maturity of cloud computing offerings, specifically around security, availability, cost monitoring/management, integration, and standards."

Additional key takeaways from IDC's research include:

• While spending on public IT cloud offerings in 2014 will reach 12% of the size of traditional IT product spending, it will be over 25% of the net-new growth in traditional IT products. Growth-oriented IT vendors should invest in proportion to this net-new growth impact, rather than cloud services' revenue impact.
• Among the five primary cloud services segments forecast in this document, cloud applications dominated in 2009, but IDC forecasts that by 2014 a less skewed distribution of revenue will occur, with applications accounting for a little over one-third of market revenue and increased revenue shares in infrastructure and platform-as-a-service (PaaS) segments.
• Adoption growth will shift away from U.S. dominance. Revenue from public IT cloud services in 2009 was heavily concentrated in the United States (70.2%), but by 2014 the U.S. share will drop to 51.4%, with other regions/countries – notably Western Europe and Asia/Pacific (excluding Japan) – growing share rapidly.

The IDC study, Worldwide and Regional Public IT Cloud Services 2010-2014 Forecast (IDC #223549) forecasts revenue growth from public IT cloud services through 2014, segmented by five functional categories within eight regions/countries. The forecast data, driven by IDC's key assumptions for public IT cloud services development and adoption, lead to this document's key conclusions regarding cloud offerings' revenue and growth impacts on the IT industry, customer adoption shifts among the five IT cloud services categories, and shifting adoption patterns among the eight regions/countries.

For more information about the impact of cloud services, please go to IDC's Cloud Research Resource Center.

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 1000 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries worldwide. For more than 45 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.