With the constant increase in cloud adoption, the industry is growing rapidly. Analysts are conservatively suggesting that this growth may stagnate significantly in the next few years as the market becomes saturated. This cloud saturation could alter the values of major cloud companies.
Right now, Morgan Stanley estimates that about 20 percent of all workloads run on the cloud. “That 20 percent is a very important number because if you look at other adoption cycles, whether it’s notebooks, smartphone penetration, the x86 server, even digital music and video games, when you get to that 20 percent penetration point, that curve inflects and growth accelerates,” Nowak said.
When you get to that 20 percent penetration point, that curve inflects and growth accelerates.That shouldn’t come as a surprise to anyone who has noticed the surge in Amazon Web Services revenue over the last few years. The real question is whether or not growth continues to accelerate this pace once public cloud hits the 50 percent penetration mark, which Morgan Stanley expects to happen around 2020.
The rapid growth of the cloud has changed the direction of companies like Microsoft and Oracle, and added incredible value to Amazon’s business. In the next few years as the technology is embraced by more companies and in more applications throughout companies already using a cloud, the potential slowed growth could be a big factor in the values of the companies providing the majority of cloud infrastructure.
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