Cloud Solutions Market Growth
Approximately 13,505 organizations in the US have at least one application in the cloud with the annual spending by the organizations on cloud solutions projected to hit US$135.78 billion by the end of the year. The cloud computing industry is projected to experience an annual growth rate of 16% resulting in approximately 24,453 organizations in the US that will be using cloud solutions at an estimated annual spending of $275.13 billion by 2023.
We commenced the research to determine the growth rate of the adoption rate of cloud solutions by US companies and the percentage of US companies that will adopt the use of cloud solutions in the near future by defining the "current and near future". We defined the "current" to include 2019 and 2020 and bracketed the years 2021 to 2023 as "the near future". Then we embarked on scouring through press releases and news updates from credible sources such as PR News Wire, Forbes, and USA Today to find out if they had published any relevant data regarding the adoption rate of cloud solutions by US companies. We also scanned through industry surveys conducted by authoritative companies such as Infocluth and Market Research Media. Unfortunately, we were not able to identify any relevant data from these sources. However, we were able to find information regarding the subject under investigation locked behind paywalls on Infocluth and Market Research Media. The limited sample information that was available publicly on these databases detailed the statistics of businesses that use cloud computing applications. Sample data from the paywalled report by Infocluth included some companies that are using cloud services such as Fox News, United Airlines, and Xerox Corporation.
Next, we decided to establish a proxy for businesses that are currently using cloud solutions in the US with the intention of using the proxy to calculate the growth rate of the adoption rate of cloud solutions by US companies and the percentage of US companies that will adopt the use of cloud solutions in the near future. This strategy proved worthwhile as we were able to obtain a survey report published by DNG Communications detailing a breakdown of the percentage of businesses that are currently using cloud solutions in the US.
According to the survey 73% of organizations in the US have at least one application in the cloud. Additionally, the US Census Bureau indicates that there are 18,500 businesses across the US that have more than 500 employees. Assuming that these businesses would readily represent companies interested in the cloud market, we can calculate the number of businesses in the US that use cloud solutions
73% * 18500=13,505
Therefore, 13,505 organizations in the US have at least one application in the cloud.
According to an Article published by Forbes, Wibikon predicts that cloud computing will experience an annual growth rate of 16% between 2016 to 2026. Therefore, we can use the data to calculate the number of organizations that will be using cloud solutions in the near future (2023) at a growth rate of 16% for the next 4 years to be approximately 24,453 businesses.
Additionally, we were able to find relevant data detailing the spending of companies in the US on cloud solutions. According to a report from Get The Deal Through, the spending by US businesses on cloud solutions is expected to increase from US$67 billion in 2015 to US$162 billion in 2020. We used the CAGR calculator to calculate that the current spending by US businesses to be US$135.78 billion in 2019.
Starting Value US$67 billion
Ending Value US$162 billion
Number of periods 2020 - 2015 = 5 years
Using the CAGR calculator we were able to establish that the compound annual growth rate (CAGR) for the annual spending by companies on cloud solutions to be 19.31%.
Assuming that the market will continue growing at this rate, we were able to calculate the annual spending by US organization on cloud computing from 2015 to 2025:
2015 US$67.0 billion
2016 US$79.94 billion (calculated 67 x 19.31%=79.94)
2017 US$95.38 billion (calculated 79.94 x 19.31%= 95.38)
2018 US$113.8 billion (calculated 95.38 x 19.31%=113.8)
2019 US$135.78 billion (calculated 113.8 x 19.31%=135.78)
2020 US$162.0 billion (calculated 135.78 x 19.31%=162)
2021 US$193.28 billion (calculated 162 x 19.31%=193.28)
2022 US$230.6 billion (calculated 193.28 x 19.31%=230.6)
2023 US$275.13 billion (calculated 230.6 x 19.31%=275.13)
THE CURRENT AND NEAR FUTURE CLOUD SOLUTIONS MARKET
According to a survey report published by IDG Communications on 550 organizations in the US, 73% of the organizations reported that they had at least one application relying on cloud solutions. The US Census Bureau has established that there are at least 18,500 businesses across the US that have more than 500 employees. We used the figures to calculate the number of US companies that use cloud solutions services in 2019 as approximately 13,505.
Additionally, a report from Get The Deal Through indicated that the spending by US businesses on cloud solutions is expected to increase from US$67 billion in 2015 to US$162 billion in 2020. We used these figures to estimate the current (2019) spending by US businesses on cloud solutions as US$135.78 billion with the amount projected to increase to $275.13 by 2023.
GROWTH RATE AND CHANGE FOR THE FUTURE
The cloud computing industry is projected to experience an annual growth rate of 16%. Using, this percentage annual growth rate, we were able to determine that by 2024, approximately 24,453 organization in the US will be using cloud solutions in their operations. Additionally, the US federal government is expected to exceed US$10 billion in spending for cloud computing by 2023. Assuming that the current growth rate of the annual spending on the cloud market of 19.31% remains constant over the projected period, by 2023 the annual spending on public cloud solutions is projected to hit US$275.13 billion.