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UK Cloud Computing market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Cloud Computing market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Definition

This report is concerned with cloud computing, which is defined as a type of computing that relies on sharing computing resources, rather than local servers or personal devices, to handle applications. In cloud computing, the word cloud (also frequently phrased as ‘the cloud’) is used as a metaphor for the internet. The phrase cloud computing could also therefore be defined as "a type of internet-based computing", where different services, such as servers, storage and applications, are delivered to an organisation's computers and devices through the internet. Effectively cloud computing is taking services outside of a company or organisation’s firewall on shared systems.

The goal of cloud computing is to apply high-performance computing power, normally used by military and research facilities, to perform tens of trillions of computations per second, in consumer-oriented applications such as financial portfolios, to deliver personalised information, provide data storage or power large, immersive online computer games. To do this, cloud computing uses large networks of servers typically running low-cost consumer PC technology with specialised connections to spread data-processing chores across them. This shared IT infrastructure contains large pools of systems that are linked together. Often, virtualisation techniques are used to maximize the power of cloud computing.

Market Segmentation

Cloud computing investment can be segmented into three distinct areas:

SaaS

  • SaaS represents software deployed over the internet. With SaaS, a provider licenses an application to customers, either as a service on demand, through a subscription, in a “pay-as-you-go” model, or increasingly at no charge when there is opportunity to generate revenue from streams other than the user, such as from advertisement or user list sales.

PaaS

  • PaaS can be defined as a computing platform that allows the creation of web applications quickly and easily and without the complexity of buying and maintaining the software and infrastructure underneath.

IaaS

  • IaaS is a way of delivering cloud computing infrastructure (servers, storage, network and operating systems) as an on-demand service. Rather than purchasing servers, software, datacenter space or network equipment, clients instead buy those resources as a fully outsourced service on demand. There are a number of sub-sectors that can be identified, with IaaS obtained as public or private infrastructure or a combination of the two. “Public cloud” is considered infrastructure that consists of shared resources, deployed on a self-service basis over the internet. By contrast, “private cloud” is infrastructure that emulates some cloud computing features, like virtualisation, but on a private network. Additionally, some hosting providers are offering a combination of traditional dedicated hosting alongside public and/or private cloud networks. This combination approach is generally called a “hybrid cloud”.

Company Profiles

  • Adapt/Datapipe
  • Amazon Web Services UK
  • BT Group
  • RedstoneConnect/Commensus
  • Fasthosts Internet
  • iomart Group
  • Memset
  • Nasstar
  • Rackspace
  • ThinkGrid/Colt Technology Services
  • UKFast
  • Vodafone

Expert analysis from a specialist in the field

Written by Terry Leggett, a leading analyst in the B2B sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

Cloud computing continues to grow strongly as more companies look to migrate IT activities, and early adopters increase the number of applications and processes using the cloud. Market penetration has considerable further potential, with both enterprises and SMEs increasingly adopting cloud computing solutions, which will be furthered as companies move to a scaleable pay-as-you-go model rather than capital-intensive investments. Terry Leggett
Senior B2B Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Strong growth
              • Figure 1: The cloud computing market 2014-18
            • Market penetration
              • Figure 2: Estimated adoption of cloud computing, by function, 2017
            • Is Brexit actually a market stimulus?
              • Much to gain
                • Growth across the board
                  • Figure 3: Cloud computing revenue streams, 2014-18
                • ‘Cloud everything’ – Still a long way off
                  • Will it be public, private or a hybrid?
                    • Figure 4: Cloud strategy among enterprises, 2018
                    • Figure 5: Cloud strategy among SMEs, 2018
                  • Companies and brands
                    • The worldwide leaders
                      • Figure 6: The global cloud leaders, by cloud revenue, 2017
                    • It is much more fragmented than that
                      • What we think
                      • Issues and Insights

                        • Better to have the cloud in the UK
                          • The facts
                            • The implications
                              • Is the cloud safe?
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • When will there be a ‘cloud first’ mentality?
                                      • Will Brexit have any effect?
                                        • Why is ICT equipment expenditure rising?
                                        • Market Size

                                          • Dynamic growth
                                            • Figure 7: The cloud computing market 2014-18
                                          • All revenue streams in strong growth
                                              • Figure 8: Cloud computing revenue streams, 2014-18
                                          • Market Segmentation

                                            • Applications of cloud computing
                                              • Figure 9: Proportion of businesses buying cloud computing services, by application, 2015
                                              • Figure 10: Estimated adoption of cloud computing, by function, 2017
                                              • Figure 11: Two year growth in cloud computing services penetration, by application, 2015
                                            • Size of company
                                              • Figure 12: Proportion of companies buying cloud computing services, by number of employees, 2015
                                          • Market Segmentation – Manufacturing

                                              • Figure 13: Proportion of manufacturing businesses buying cloud computing services, by application, 2015
                                              • Figure 14: Two year growth rates in cloud computing applications penetration in the manufacturing sector, 2015
                                          • Market Segmentation – Utilities

                                              • Figure 15: Proportion of utilities businesses buying cloud computing services, by application, 2015
                                              • Figure 16: Two-year growth rates in cloud computing applications penetration in the utilities sector, 2015
                                          • Market Segmentation – Construction

                                              • Figure 17: Proportion of construction businesses buying cloud computing services, by application, 2015
                                              • Figure 18: Two-year growth rates in cloud computing applications penetration in the construction sector, 2015
                                          • Market Segmentation – Wholesale

                                              • Figure 19: Proportion of wholesalers buying cloud computing services, by application, 2015
                                              • Figure 20: Two-year growth rates in cloud computing applications penetration in the wholesale sector, 2015
                                          • Market Segmentation – Retail

                                              • Figure 21: Proportion of retailers buying cloud computing services, by application, 2015
                                              • Figure 22: Two-year growth rates in cloud computing applications penetration in the retail sector, 2015
                                          • Market Segmentation – Transport & Storage

                                              • Figure 23: Proportion of transport & storage companies buying cloud computing services, by application, 2015
                                              • Figure 24: Two-year growth rates in cloud computing applications penetration in the transport & storage sector, 2015
                                          • Market Segmentation – Accommodation and Food Service

                                              • Figure 25: Proportion of accommodation and food service companies buying cloud computing services, by application, 2015
                                              • Figure 26: Two-year growth rates in cloud computing applications penetration in the accommodation and food service sector, 2015
                                          • Market Segmentation – Information and Communication

                                              • Figure 27: Proportion of information and communication companies buying cloud computing services, by application, 2015
                                              • Figure 28: Two-year growth rates in cloud computing applications penetration in the information and communication sector, 2015
                                          • Market Segmentation – Other Services

                                              • Figure 29: Proportion of other services companies buying cloud computing services, by application, 2015
                                              • Figure 30: Two-year growth rates in cloud computing applications penetration in the other services sector, 2015
                                          • Market Forecast

                                            • Growth to continue
                                                • Figure 31: Forecast cloud computing market, 2019-23
                                              • The cloud model is different in enterprises and SMEs
                                                • Figure 32: Cloud strategy among enterprises, 2018
                                                • Figure 33: Cloud strategy among SMEs, 2018
                                              • Workloads differ too
                                                • Figure 34: Workload on the cloud by size of company, 2018
                                            • The Impact of the Economy

                                              • Cloud affecting all areas of the economy
                                                • Figure 35: UK GDP quarterly development, by sector, 2004-18
                                                • Figure 36: Forecast GDP development, 2017-22
                                            • Market Trends

                                              • A change in the IT model
                                                • Figure 37: ICT equipment expenditure, 2010-17
                                              • Strong growth in SaaS, PaaS and Iaas globally
                                                • Cloud storage cost and capacity changes
                                                  • First people, then things, and ultimately everything
                                                    • Security
                                                      • Hybrid cloud solutions
                                                        • Challenges change by company size
                                                          • Figure 38: Cloud challenges by company size, 2018
                                                      • Market Drivers

                                                        • Stimulators and inhibitors
                                                            • Figure 39: Cloud adoption by decision drivers, 2017
                                                          • Internet access and usage
                                                            • Figure 40: Worldwide internet usage, BY region 2010-17 (Millions and %)
                                                            • Figure 41: Proportion of businesses with internet access in the UK, by size of company, 2012-16 (%)
                                                          • It’s all about speed
                                                            • Figure 42: Proportion of businesses with internet access and type of connection, by number of employees, 2012-16 (%)
                                                            • Figure 43: Proportion of businesses by maximum contracted internet connection speed, by number of employees, 2012-16 (%)
                                                          • Websites
                                                            • Figure 44: Proportion of companies operating a website, by size of company, 2016
                                                        • Companies and Brands – What You Need to Know

                                                          • It’s fiercely competitive
                                                            • Will the hybrid cloud be the end game?
                                                            • Industry Structure

                                                              • Investment requirements create stability
                                                                  • Figure 45: Changes in the structure of the data processing, hosting and related activities industry, 2013-17
                                                              • Competitive Strategies

                                                                • The hybrid model
                                                                  • The Microsoft target
                                                                    • Better, cheaper and easier
                                                                      • The AWS model
                                                                        • A surprisingly late entrant
                                                                          • The Google model
                                                                            • A sector right for consolidation
                                                                              • It’s not all about the technology giants
                                                                              • Company Profiles

                                                                                • The global giants
                                                                                  • Figure 46: The global cloud leaders, by cloud revenue, 2017
                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                  • Abbreviations
                                                                                    • Methodology