Revenue for the market is projected to total $266.4 billion next year, according to a new estimate from Gartner.
As more organizations hop onto the cloud to outsource management of their applications, infrastructure, and other assets, revenue for the cloud services market is projected to jump by 17% in 2020, says Gartner.
In dollars, the market would bring in $266.4 billion next year, up from $227.8 billion this year. Forecasting even further, Gartner expects the market's revenue to rise to $308.5 billion in 2021 and $354.6 billion in 2022.
SEE: Executive's guide to integrating the hybrid cloud (free ebook) (TechRepublic)
Among the different segments, Software as a service (SaaS) will remain the biggest due to the scalability of subscription-based software. The SaaS market is expected to generate revenue of $116 billion next year, up from $99.5 billion this year.
In 2020, the second-largest segment will be cloud system infrastructure services, or infrastructure as a service (IaaS). The global IaaS market will hit $50 billion next year, up from $40.3 billion this year, a jump of 24%. The growth in IaaS is attributed to the increased demands of applications and workloads, which require the type of infrastructure that traditional data centers can't handle, according to Gartner.
Other cloud segments expected to see an increase in revenue in 2020 and beyond are Cloud Business Process Services (BPaaS), Cloud Application Infrastructure Services (PaaS), and Cloud Management and Security Services.
The different variations of cloud computing are among the top three areas where most global CIOs will increase their investments next year, according to Gartner. All these cloud migrations will also keep IT teams busy as they migrate to cloud-based applications and relocate existing assets.
"The cloud managed service landscape is becoming increasingly sophisticated and competitive," Sid Nag, research vice president at Gartner, said in a press release.
"In fact, by 2022, up to 60% of organizations will use an external service provider's cloud managed service offering, which is double the percentage of organizations from 2018," Nag said. "Cloud-native capabilities, application services, multicloud and hybrid cloud comprise a diverse cloud ecosystem that will be important differentiators for technology product managers. Demand for strategic cloud service outcomes signals an organizational shift toward digital business outcomes."
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