As we gear up to launch our 2016 Cloudex Awards – Clearwater International’s annual hunt for the top 20 independently owned cloud technology businesses in the UK – it seems like a good time to take stock of where the cloud market is today.
When we started the index back in 2010 our thesis was always that it would significantly out-perform the main markets (correct), but also that this effect would diminish over time as cloud computing became the norm. It certainly seems that we’re several steps closer to that being the case. A recent survey by Better Buys found that the shift to cloud computing technologies is accelerating and the market will increase from around €7.3bn in 2015 to a whopping €49.9bn by 2026.
At Clearwater International, 8 out of the last 10 software deals we have completed have been Software as a Service (SaaS) model businesses and our current pipeline continues to reflect that trend, demonstrating the appetite for the SaaS-model in today’s market.
Whilst the US still accounts for around half of the total market, the UK and European picture is also one of notable acceleration. The report found that 1,400 new SaaS companies have sprung up around the world in the last 5 years, challengers to the industry giants who are still trying to find a way to capitalise on the trend.
What’s driving the change? Interestingly, a recent report for Six Degrees Group by IT industry analyst firm Freeform Dynamics, revealed that only 15% of respondents were purely motivated by cost savings when adopting cloud technology. In fact, whilst cost was of course a consideration, more important was the delivery of added value to the business. 95% of respondents indicated some level of cloud use.
So as the cloud industry continues its march to domination look out for our upcoming announcement on the opening of entries for this year’s awards and take the opportunity to shout about your part in it.