The Hostway Blog

Flexibility and Management Drive Private Cloud Market

When cloud technology first emerged, many businesses were hesitant to immediately dive in due to the perceptions of its security level. Thankfully, the cloud has come a long way since then. As adoption rates continue to surge, the marketplace for these solutions is considerably expanding.

Currently, we'll examine the private cloud market, including forecasted growth and the driving factors behind it.

Market growth by the numbers
According to Technology Business Research, the private cloud market is poised for considerable growth over the next three years. The findings, published last year, predicted that the private cloud market would likely expand at a compound annual growth rate of 14 percent through 2018, creating $69 billion in provider profits over the next few years.

A similar report from TechNavio also forecasted considerable growth in the private cloud market. Researchers discovered that as more enterprises move toward private cloud infrastructures, the market will likely experience a CAGR of 36.93 percent until 2019.

Shifting growth contributors
In previous years, staple benefits like reducing operating costs and increasing data protection have encouraged adoption of private cloud systems. As with hybrid and public platforms, private clouds allow critical content to be stored off-site, lessening the need for on-premises equipment investments and maintenance. As private clouds are only accessible to authorized users, many businesses enjoy peace of mind with this system in place.

However, the TBR report found that other factors are also driving market growth.

"As private cloud matures, growth is entering a different phase that is driven more by the flexibility and ease of management than by just security or cost savings," noted Allan Krans, TBR cloud practice manager and principal analyst. "The skills gap in implementing, migrating and managing private cloud is driving customers to seek vendors that deliver clear and end-to-end migration road maps."

In this way, service providers' efforts to simplify the process of deploying the private cloud and moving critical content are paying off. With more vendors offering options that assist businesses with the initial implementation of the technology, companies can worry less about the perceived skills gap and focus more attention on the actual use of the private cloud within their business.

Cloud security: Still a top priority
Although TBR researchers found that other factors are now driving private cloud market growth, this does not mean that security isn't still a top priority. In fact, 59 percent of respondents in the study noted that security is a top concern and/or pain point that is factored in with cloud adoption. In addition, 19 percent said it would be worthwhile for their business to hire a third-party provider to address cloud security worries. As a result, the cloud security market will see continued growth as well, expected to reach $3.1 billion value by the end of 2015.

Overall market growth in the private cloud sector shows that not only demand for these services continually increasing, but that ease of use and management are now driving adoption rates.

To find out more about what a private cloud solution can do for your business, contact Hostway today.