The Top Five Vertical Markets for IaaS Offerings

The cloud computing phenomenon now includes a set of services and technologies that enable the delivery of on-demand computing services over the Internet in real-time, allowing end-users instant access to data and applications from any device with online access.

Although still in its infancy, gaining traction has not been a problem. According to the latest market study by In-Stat, Infrastructure as a Service (IaaS) is set to grow to roughly $4 billion by 2015.

"Growth is expected in all public cloud service segments," says Greg Potter, Analyst at In-Stat.

Many Software-as-a-Service (SaaS) applications have been around for a long time, but now with the advent of entire platforms for these applications they're gaining the necessary visibility among businesses to reach renewed momentum in the marketplace.

Infrastructure-as-a-Service (SaaS) is also gaining increased traction, especially in the small business market.


In-Stat's latest market study includes the following insights:
  • SaaS (software as a service) is poised to grow 142 percent between 2010 and 2015.
  • Overall public cloud computing (IaaS, SaaS, and PaaS) is set to grow 153 percent from 2010 to 2015.
  • Small business (5 to 99 employees) is the fastest growing size segment growing from $2.5 billion by 2010 to $6.6 billion by 2015.
  • Small business account for over half of the market in SaaS and IaaS.

According to the In-Stat assessment, the top five vertical markets for IaaS offerings, in terms of 2011 market revenue, will be hospitality and food, healthcare and social services, and retail trade. The bottom 5 verticals will be mining, forestry, fishing, and agricultural services and utilities.
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How Healthcare IT will Migrate to Cloud Services

According to the findings from a global market study, the healthcare sector has a highly complex IT environment that's supporting a very diversified professional user population (i.e., clinicians) -- along with their patients in life-critical situations. The industry is currently facing growing economic and regulatory pressures that make its IT infrastructure primed for change.

Therefore, all organizations will likely consider the potential benefits of migrating to cloud computing. Improvement in the quality of healthcare services is a key driver for managed cloud service adoption.

Billions of dollars of federal incentives are provided for the delivery of quality healthcare services, and expanding the use of electronic health record (EHRs) systems -- as well as providing the basis for the exchange of information and data across and between the providers. These EHR systems are expected to be used extensively by 2014.

Another significant opportunity is the consumer-oriented cloud application -- offering the potential of improving healthcare communications and enabling patients to manage their own medical records. The cloud platform fits well with new business models, which often require uninterrupted access from multiple providers to a single patient, such as a Patient Centered Medical Home (PCMH) model or Accountable Care Organization (ACO).

Cost Reduction Potential Across the Ecosystem

Reducing costs in the healthcare industry ecosystem is a key motivation for cloud service adoption. This is true for all healthcare organizations, irrespective of their size and area of specialization. In making future IT investment decisions, health organizations will likely measure the return on investment closely. For many new Health Information Exchange (HIE) models, the infrastructure is already in place.

In today’s healthcare system, access to good facilities often depends on the physical location. As more health data moves into the cloud and telehealth technologies become popular, everyone will be able to access health information in real-time from anywhere. The result will be better access to healthcare and relevant data, especially in the remote areas. However, risks around data privacy, security and safety, and state specific policy rules are among the top concerns raised for the adoption of cloud computing.

As a result, these issues currently are the greatest barriers for embracing cloud computing. However, according to the MarketsandMarkets assessment, the data security issue has the potential to increase cloud service adoption. By centralizing and standardizing handling of patient data across the healthcare ecosystem, the cloud could enable stronger security and authentication measures to be imposed by SaaS (software as a service) providers, thereby actually improving protection and integrity of data.

According to MarketsandMarkets latest research, globally 32 percent of healthcare facilities are already using some form of cloud application. Moreover, close to 75 percent of the organizations not using any cloud applications are already considering adopting them in the next three to five years.

In summary, the top priorities for the healthcare industry are:
  • Improvement in the quality of healthcare services.
  • Reduction of costs.
  • Increasing access to the healthcare systems.
  • Data privacy and security.
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SMB Demand for Productivity Oriented Mobile Apps

Small businesses account for two-thirds of all new employment in America, according to the historical U.S. government statistics. Developing trends within this key sector are therefore a leading market indicator of the nation's economic stability and forward-looking performance.

That said, new U.S. business spending research, that was performed by In-Stat, would indicate that some things are starting to trend upwards.

According to the latest market study by In-Stat, small and medium businesses (SMBs) plan to increase their spending on wireless data services by 42 percent from 2010 to 2015.

Moreover, U.S. small office and home office (SOHO) businesses will lead the category, forecast to increase their spending by over 46 percent on wireless data from 2010 to 2015.

New Productivity Oriented Wireless Data Applications

"Voice has become a commodity, with growth in voice services essentially being stagnant across all sizes of business," says Greg Potter, In-Stat Data Analyst.

Messaging services have been in demand, but the new procurement outlook is stagnant, with marginal increases or decreases -- depending on the the size of business.

In-Stat believes that future growth is all about providing data access to smartphones, business-centric media tablets, and netbook PCs. Clearly, new productivity-oriented mobile apps and related cloud based services are helping to stimulate this demand.

According to the latest market study by ABI Research, users of enterprise B2E (business-to-employee) and B2C (business to customer) smartphone and media tablet mobile applications (apps) are forecast to grow at a CAGR of nearly 90 percent -- and exceed 830 million active users by 2016.

In-Stats latest market study highlights include:
  • SMB businesses in total (SMB includes SOHO, small and medium businesses) consume about half of all wireless services on a revenue basis.
  • The consumption jumps to almost three-fourths when one is only considering corporate liable expenditures.
  • Total mobile handset spending is set to rise over 10 percent from 2010 to 2015.
  • The construction vertical segment will spend 120 million in the wireless device segment in 2012.
  • In 2013, the retail trade segment will spend 2.8 billion in wireless voice services.
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