Forrester Report: Public Cloud Will Hit $1,000,000 by 2026

Public Cloud Growth Expected to Continue to Accelerate in Coming Years, According to Forrester Public cloud market outlook report.

The big figure in the report is $1.03 trillion. That’s Forrester’s forecast for the revenue generated by the cloud computing industry by 2026, up from $446.4 billion in 2022.

Forrester expects the major cloud providers, including Amazon Web Services (AWS), Google and Microsoft, will continue to show revenue gains in the coming years. And data and analytics will be among the hottest areas of the cloud market in terms of revenue growth.

“A notable finding is the growth pattern of cloud database and analytics services,” said Lee Sustar, principal analyst at Forrester. ITPro today. “It will see a threefold increase by 2026 as cloud providers seek to build relationships with customers far beyond CIO and IT infrastructure teams.”

Through analytics and business intelligence, cloud providers aim to embed themselves deeply into the day-to-day 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 an in-depth look at the subcategories of services that reside in the cloud.

Data and analytics in 2022 accounted for $27.6 billion in revenue and is expected to reach $89.5 billion in 2026. In Software as a Service (SaaS) for cloud application providers, revenue in 2026 is expected to reach $396.9 billion, up from $234.6 billion in 2022.

Cloud development services will also expand as vendors create new services to help organizations develop applications. The segment is expected to generate $24.9 billion in 2022 and double by 2026 to $51 billion.

In the cloud infrastructure services category, which includes core compute and storage services used by organizations, Forrester expects significant growth. For 2022, the infrastructure category will generate revenues of $159.3 billion in 2022; which will reach $495.5 billion in 2026, according to Forrester forecasts.

Forrester’s predictions for the infrastructure category also look specifically at large public cloud providers, with a prediction that AWS will continue to dominate with revenue of $181.5 billion in 2026, with Microsoft at $155.1 billion and Google behind in this category at $34.9 billion.

Where will cloud providers be competing in the years to come?

In the core area of ​​cloud infrastructure services, Forrester expects to see continued competition in a number of key areas.

Instance types should be an area of ​​competition as vendors go beyond x86 for Arm as well as purpose-built AI hardware. Forrester also predicts that non-hyperscalers will begin to exert more influence over 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 resumption of growth of cloud database and analytics services, the growth of cloud infrastructure services will increase more slowly but remain stable, Sustar said.

“This reflects the number of IT workloads that have yet to migrate to the cloud,” he said. “The prospect of this additional business will lead to intense competition among hyperscalers to continue investing in new data centers and regions and will create opportunities for non-hyperscalers to focus on particular areas, such as industrial clouds, data sovereignty or specialized workloads.”

About the Author

    Portrait of Sean Michael KernerSean Michael Kerner is a computer consultant, technology enthusiast and handyman. He consults for industry and media organizations on technology issues.

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