Growth in the public cloud is expected to continue to accelerate in the coming years, according to Forrester's Public Cloud Market Outlook report.
The big number in the report is $1.03 trillion. That's Forrester's forecast for what the cloud computing industry will generate in revenue by 2026, up from $446.4 billion in 2022.
Forrester expects that the major cloud providers, including Amazon Web Services (AWS), Google, and Microsoft, will continue to post revenue gains in the coming years. And data and analytics will be among the hottest sectors of the cloud market in terms of revenue growth.
"One notable finding is the growth pattern in cloud database and analytics services," Lee Sustar, principal analyst at Forrester, told ITPro Today. "It will see a threefold increase by 2026 as the cloud providers seek to build customer relationships well beyond the CIO and IT infrastructure teams."
With analytics and business intelligence, cloud providers aim to become deeply entrenched in the daily operations of business users, Sustar added.
Forrester Public Cloud Market Outlook Forecasts $1 Trillion in Revenue by 2026
In addition to providing a forecast for the industry as a whole, the Forrester report takes a deep dive into the subcategories of services that are in the cloud.
Data and analytics in 2022 represented $27.6 billion in revenue and is set to grow to $89.5 billion in 2026. In the software-as-a-service (SaaS) category for cloud application providers, revenues in 2026 are expected to come in at $396.9 billion, up from $234.6 billion in 2022.
Cloud development services will also grow as vendors build out new services to help organizations with application development. The segment is expected to generate $24.9 billion in 2022 and will double by 2026 to $51 billion.
In the cloud infrastructure services category, which includes the core compute and storage services that organizations use, Forrester is forecasting significant growth. For 2022, the infrastructure category will have revenue of $159.3 billion in 2022; that will reach $495.5 billion in 2026, Forrester forecasts.
The Forrester forecast for the infrastructure category also specifically looks at big public cloud providers, with a prediction that AWS will continue to lead with revenue of $181.5 billion in 2026, with Microsoft at $155.1 billion and Google trailing in this category at $34.9 billion.
Where Cloud Vendors Will Compete in the Coming Years
In the core area of cloud infrastructure services, Forrester expects to see continued competition in a number of key areas.
Instance types are expected to be an area of competition as the vendors look beyond just x86 to Arm as well as purpose-built artificial intelligence hardware. Forrester is also forecasting that non-hyperscalers will begin to exert more influence into cloud network, compute, and storage pricing. According to the report, the 2022-2026 period will see non-hyperscalers such as Oracle Cloud Infrastructure offer competitive prices.
Compared with the upswing in growth in cloud database and analytics services, growth from cloud infrastructure services will increase more slowly but will remain steady, Sustar said.
"That's a reflection of how many IT workloads have yet to move to the cloud," he said. "The prospect of that additional business will drive intense competition among hyperscalers to keep investing in new data centers and regions and create opportunities for non-hyperscalers to focus on particular areas, such as industry clouds, data sovereignty, or specialized workloads."
About the authorSean Michael Kerner is an IT consultant, technology enthusiast and tinkerer. He consults to industry and media organizations on technology issues.