​Security remains defining factor as private cloud market edges towards $39 billion value

“Security is a driver and a barrier of hosted private cloud adoption..."

The hosted private cloud market will continue to grow at a low double-digit CAGR, reaching $US39 billion through to 2019.

Technology Business Research believes continued widespread enterprise adoption of cloud solutions will drive steady revenue growth for vendors across all cloud segments, particularly for hosted private cloud vendors that offer the flexibility of public clouds with the added layer of security due to the dedicated instance nature of hosted private cloud.

“Security is a driver and a barrier of hosted private cloud adoption and will greatly affect the private cloud landscape through 2019,” says Cassandra Mooshian, Cloud Analyst, TBR.

“The best case scenario for hosted private cloud vendors is that customers favour the added security benefits of a hosted private cloud environment over a public cloud environment, while the worst case is another large-scale security breach compounds lingering security concerns and leads to a halt in cloud adoption.”

Mooshian says the mix of IaaS to SaaS in hosted private cloud being weighted more heavily to IaaS suggests enterprises are bringing their own application licenses to vendors’ IaaS solutions.

“This indicates an opportunity for vendors to capitalise on by bringing traditional software to cloud environments for their enterprise customers that are not ready to restructure their software consumption patterns but want to exploit cloud economics to reduce costs,” Mooshian adds.

For Mooshian, data centre hosting experts, especially IBM and HP, will benefit from this added hosting opportunity, while it will be more difficult for software providers to transition their software licenses to subscriptions in private cloud.

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