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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. Executive Summary

      • The market
        • Figure 1: UK market for cloud computing, 2013-17 actual and 2018-22 forecast
        • Figure 2: Inhibitors to moving specific application of cloud services, 2016
        • Figure 3: Inhibitors to moving specific application of cloud services, 2016
        • Figure 4: Areas of cloud services where adoption expected to be increased over next 12 months, 2016
        • Figure 5: Proportion of businesses buying cloud computing services, by type of business, 2015
        • Figure 6: Proportion of businesses buying cloud computing services in the UK, by size of company, 2015
        • Figure 7: Segmentation of cloud computing by type of service, 2017
      • Market factors
        • Companies
          • What we think
          • Key Insights

              • Will Brexit inhibit market development?
                • Public or private cloud?
                  • How is the cloud industry evolving?
                  • Introduction

                    • Definitions
                      • Methodology
                        • Abbreviations
                          • Market positioning and issues in the market
                          • UK Economy

                            • Overview
                              • Figure 8: Forecast GDP development 2017-21
                              • Figure 9: UK GDP quarterly development, 2004-17
                            • Inflation
                              • House prices
                                • Figure 10: UK House price changes, 2006-17
                              • Interest rates
                                • Consumer spending
                                  • Manufacturing
                                    • Figure 11: UK manufacturing, 2014-17
                                  • Business investment
                                    • Figure 12: UK GFCF 2003-17
                                  • Imports
                                    • Exports
                                    • Market Factors

                                        • The major factors
                                          • The major corporate factors driving and preventing cloud computing adoption
                                            • Internet access and usage
                                              • Figure 13: Worldwide internet usage, by region, 2000-17
                                              • Figure 14: Proportion of businesses with internet access, by size of company, 2011-15
                                              • Figure 15: Proportion of businesses with broadband, by size of company, 2011-15
                                              • Figure 16: Proportion of businesses by maximum contracted internet connection speed, by size of company, 2011-15
                                            • Business web sites
                                                • Figure 17: Proportion of businesses with a website, by size of business, 2011-15
                                                • Figure 18: Proportion of businesses with website facilities, by size of business, 2014-15
                                              • Major growth in cloud adoption
                                                • Figure 19: Companies with hosted or cloud-based services, 2010-15
                                                • Figure 20: Companies purchasing cloud computing services over the internet, by size of company, 2013 and 2015
                                              • Use of the cloud covers all sectors, but has huge potential for further growth
                                                • Figure 21: Primary approach to IT, by company size, 2015
                                              • Evidence of the savings made by cloud adoption
                                                • Figure 22: Level of cost savings from cloud usage, 2015
                                            • Market Size and Trends

                                              • Key points
                                                • Market size
                                                  • Figure 23: UK cloud computing market, 2013-17
                                                • Market penetration
                                                  • Figure 24: Proportion of businesses buying cloud computing services in the UK, 2013 and 2015
                                                • Manufacturing
                                                  • Figure 25: Proportion of manufacturing businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Utilities
                                                  • Figure 26: Proportion of utilities businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Construction
                                                  • Figure 27: Proportion of construction businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Wholesale
                                                  • Figure 28: Proportion of wholesale businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Retail
                                                  • Figure 29: Proportion of retail businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Transport
                                                  • Figure 30: Proportion of transport and storage businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Accommodation and food
                                                  • Figure 31: Proportion of accommodation and food services businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Information and communication
                                                  • Figure 32: Proportion of information and communication businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Other services
                                                  • Figure 33: Proportion of other services businesses buying cloud computing services, by type of service, 2013 and 2015
                                                • Size of company
                                                  • Figure 34: Proportion of businesses buying cloud computing services, by size of company, 2015
                                                  • Figure 35: Proportion of businesses identifying their primary approach to IT, by application, 2015
                                                • Market trends
                                                  • Primary market inhibitors
                                                    • Figure 36: Inhibitors to moving specific application of cloud services, 2016
                                                    • Figure 37: Inhibitors to moving specific application of cloud services, 2016
                                                  • Expected areas of development
                                                    • Figure 38: Areas of cloud services where adoption is expected to be increased over next 12 months, 2016
                                                  • The G-cloud
                                                      • Figure 39: Sales to the G-cloud, 2012-17
                                                  • Market Segmentation

                                                    • Key points
                                                      • Market segmentation
                                                        • By service
                                                          • Figure 40: Segmentation of cloud computing by type of service, 2017
                                                        • SaaS
                                                          • PaaS
                                                            • IaaS
                                                            • Industry Structure

                                                              • Key points
                                                                • Industry development
                                                                    • Figure 41: Analysis of the changes in the structure of the data processing, hosting and related activities industry, 2012-16
                                                                  • Structure by employment
                                                                    • Figure 42: Analysis of the employment structure of the data processing, hosting and related activities industry (excluding computer games), 2015-16
                                                                  • Structure by turnover
                                                                    • Figure 43: Analysis of the financial structure of the data processing, hosting and related activities industry, 2015-16
                                                                  • Company profiles
                                                                  • Adapt/Datapipe

                                                                      • Figure 44: Financial analysis of Adapt HoldCo, 2012-16
                                                                    • Company strategy
                                                                    • Amazon Web Services UK

                                                                          • Figure 45: Financial analysis of Amazon Web Services UK, 2014-16
                                                                        • Company strategy
                                                                        • BT Group

                                                                            • Figure 46: Financial analysis of BT Group, 2013-17
                                                                            • Figure 47: Turnover analysis of BT Group, 2017
                                                                          • BT Global Services
                                                                            • Figure 48: Regional analysis of BT Global Services, 2017
                                                                          • Company strategy
                                                                          • RedstoneConnect/Commensus

                                                                              • Figure 49: Financial analysis of Commensus, 2012-17
                                                                            • Company strategy
                                                                            • Fasthosts Internet

                                                                                • Figure 50: Financial analysis of Fasthosts Internet, 2012-16
                                                                              • Company strategy
                                                                              • iomart Group

                                                                                  • Figure 51: Financial analysis of iomart Group, 2013-17
                                                                                • Company strategy
                                                                                • Memset

                                                                                      • Figure 52: Financial analysis of Memset, 2012-16
                                                                                    • Company strategy
                                                                                    • Nasstar

                                                                                          • Figure 53: Financial analysis of Nasstar, 2012-16
                                                                                        • Company strategy
                                                                                        • Rackspace

                                                                                              • Figure 54: Financial analysis of Rackspace, 2011-15
                                                                                            • Company strategy
                                                                                            • ThinkGrid/Colt Technology Services

                                                                                              • ThinkGrid
                                                                                                • Figure 55: Financial analysis of ThinkGrid, 2011-13
                                                                                              • Colt Technology Services
                                                                                                  • Figure 56: Financial analysis of Colt Technology Services, 2011-15
                                                                                                • Company strategy
                                                                                                • UKFast

                                                                                                      • Figure 57: Financial analysis of UKFast.Net, 2011-15
                                                                                                    • Company strategy
                                                                                                    • Vodafone

                                                                                                        • Figure 58: Financial Analysis of Vodafone Group, 2012-16
                                                                                                        • Figure 59: Turnover Analysis of Vodafone Group, 2016
                                                                                                      • Company strategy
                                                                                                      • Forecast

                                                                                                        • Key points
                                                                                                          • The market
                                                                                                              • Figure 60: Forecast UK cloud computing market, 2018-22
                                                                                                              • Figure 61: Forecast cloud market segmentation, 2022