Wednesday, January 19, 2011

Global Cloud Computing Revenue Forecast

The Yankee Group global forecast for cloud computing revenue includes some key definitions.

Yankee Group defines midsize to large enterprises as 249 or more employees. The forecast also includes SMBs, which the firm defines as organizations with 2 to 250 employees. The forecast excludes consumer cloud services but does allow that small businesses will often adopt consumer cloud services for business use. Yankee Group excludes sole proprietors from infrastructure as a service and platform as a service because analysts do not believe the typical small business has a need for those services.

The forecast likely understates demand in the small business segment to the extent that many small software firms will have high incentives to buy platform and infrastructure services "as a service."

To forecast revenue, the analysts start with the concept of average revenue per employee per month. Yankee Group calculates ARPE for SaaS, IaaS and PaaS as $4, $2 and $1, respectively.
For example, a typical enterprise will spend $4 per employee per month on SaaS. This is equivalent to $48 per year per employee, or what a small business or sole proprietor might pay for an online backup service such as Mozy or Carbonite and simple collaboration software like Evernote or Dropbox.

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