The reality of having Cloud Software becoming the major source of sold software may no longer be up in the clouds.

According to IDC, a quarter of all software sales by the year 2020 will be made on Cloud based services, seeing revenue for this sector more than double the estimated figure for 2016 to around $200 billion.


The news comes in a half yearly report by IDC analysing Cloud spending trends. Senior research analyst at IDC, Benjamin McGrath, said of the current Cloud based growth:

“Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets.”

The growth in cloud software was dominated in 2015 by Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS) offerings, accounting for around 84% of Cloud based revenue.

That said, IDC also expects those figures to flip on their head with the almost exponential current growth of Infrastructure-as-a-Service (IaaS) over the next few years.

IDC surveyed 20 industries across 54 countries for their research and found that the main drivers pushing Cloud based spending were those companies in the financial and banking sectors.

The IDC report also expected retail, media, and telecommunications industries to significantly boost their revenues and growth in the next five years in relation to Cloud software.

Eileen Smith, a director of IDC’s insights and analysis division said:

“Cloud computing is breaking down traditional technology barriers as line of business leaders and their IT organisations rely on cloud to flexibly deliver IT resources at the lower cost and faster speed that businesses require…Organisations across all industries are now free to adapt to market changes quicker and take more risks, as they are no longer bound by legacy IT constraints.”