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Cloud as a Service revenue from carrier providers to hit $10 billion

Cloud-as-a-service revenue from telecom operators is set to reach nearly $10 billion annually in 2019, according to new forecasts from Technology Business Research.

Figures from TBR’s Carrier Cloud Market Forecast 2014-2019 show that while carrier cloud providers will continue to increase revenue annually, growth will decelerate over the next several years due to strong competition from pure plays and other cloud providers.

“Public cloud revenue growth started decelerating significantly in 2015 due to more businesses shifting to private and hybrid cloud solutions,” explains TBR executive analyst Michael Sullivan-Trainor.

“Though public cloud services will remain the prominent source of carrier cloud revenue, private cloud services are growing at a higher rate as more enterprises prefer the platform’s enhanced security,” he says.

Sullivan-Trainor says the shift away from public cloud is also influenced by competitive pressures.

“U.S. carriers are struggling to gain traction in the public cloud market against seasoned competitors, such as Amazon Web Services, that are offering broader, more affordable service portfolios,” he explains.

“Instead of attempting to outcompete incumbent cloud vendors, telcos are focusing on partnering with these companies providing network connectivity to their services through interconnection platforms such as AT&T’s NetBond.”

The analyst firm also examined the carrier cloud market within service segments, including IaaS, SaaS and PaaS.

According the forecast, there will be a limited number of public cloud IaaS vendors by 2019 as IaaS becomes highly commoditised.

Conversely, the maturing SaaS market will cause revenue growth to decelerate through 2019, TBR says.

To bolster SaaS revenue, the company says carriers will collaborate with software providers to offer solutions targeting new lines of business and verticals.