Strategic Planning Assumptions: Cloud Deployment Models
Strategic Planning Assumptions for Cloud Deployment Models
On-Premises Deployment
On-premises infrastructure will continue to be preferred by organizations with strict security/regulatory requirements, legacy applications, and high-performance computing needs. However, the percentage of organizations relying solely on on-premises deployments will steadily decline over the next 7-11 years, with a projected 30% reduction by 2030.
Technological advancements and the increasing maturity of cloud security measures will mitigate some of the concerns around data protection and compliance, leading 40% of organizations with on-premises deployments to migrate at least a portion of their workloads to the cloud by 2028.
The need to reduce IT management overhead and capital expenditure on hardware/facilities will drive 60% of organizations with on-premises deployments to adopt a hybrid cloud approach, leveraging a combination of on-premises and cloud-based infrastructure, by 2027.
Colocation Deployment
Colocation will remain a popular choice for organizations that want to maintain control over their hardware while outsourcing data center management.
Approximately 25% of enterprises will utilize colocation services by 2029, a 10% increase from 2024 levels.
As cloud adoption continues to grow, the colocation market will experience a shift towards providing more managed services and hybrid cloud offerings.
By 2026, 40% of colocation providers will offer integrated IaaS and PaaS solutions to better serve organizations transitioning to the cloud.
Concerns around data sovereignty and compliance will drive 30% of organizations in heavily regulated industries to utilize colocation services with on-premises hardware by 2030, as they seek to balance control and flexibility.
Hosting Deployment
The traditional hosting model will continue to decline, with only 15% of organizations using dedicated hosting by 2027, down from 25% in 2024, as cloud-based IaaS and PaaS solutions become more prevalent.
Hosting providers will adapt their offerings to focus on managed services and specialized application hosting, rather than generic infrastructure provisioning.
By 2028, 60% of hosting providers will generate the majority of their revenue from managed services and PaaS-like solutions.
Smaller organizations and those with specific application requirements that do not warrant a full cloud migration will continue to utilize hosting services, accounting for approximately 20% of the hosting market by 2029.
Infrastructure-as-a-Service (IaaS) Deployment
IaaS will experience rapid growth, with the global IaaS market projected to reach $200 billion by 2026, a 25% CAGR from 2021. This growth will be driven by the need for scalable, on-demand computing resources and the desire to offload infrastructure management.
By 2027, 60% of enterprises will utilize IaaS for at least one workload, with a focus on applications with variable usage patterns, the need for customization, and those requiring low latency or high-performance computing.
Concerns around data sovereignty, vendor lock-in, and the technical expertise required to manage IaaS environments will lead 35% of organizations to adopt a multi-cloud IaaS strategy by 2029, leveraging two or more cloud providers to mitigate these risks.
Platform-as-a-Service (PaaS) Deployment
PaaS adoption will grow at a 23% CAGR from 2021 to 2026, reaching a market size of $80 billion, as organizations seek to simplify application development and deployment.
By 2028, 50% of organizations will utilize PaaS for at least one application, driven by the need to focus on core business capabilities rather than infrastructure management and the desire for rapid, high-availability application delivery.
Concerns around vendor lock-in and the limitations of customization in PaaS environments will lead 45% of organizations using PaaS to adopt a hybrid approach, combining it with IaaS or on-premises infrastructure, by 2030.
Software-as-a-Service (SaaS) Deployment
SaaS will continue to dominate the cloud services market, with the global SaaS market expected to reach $307 billion by 2026, growing at an 11.7% CAGR from 2020.
By 2027, over 70% of software will be delivered as a service, driven by the scalability, flexibility, and potential cost savings of the SaaS model, as well as the increasing user preference for cloud-based applications.
Concerns around data security, compliance, and the challenges of integrating SaaS applications with on-premises systems will lead 55% of organizations to adopt a multi-cloud SaaS strategy, utilizing multiple SaaS providers, by 2029.
Applications with low-latency requirements or extensive customization needs will remain less suited for the SaaS model, accounting for approximately 20% of enterprise software deployments by 2030.
Predictions
Hosting Deployment
The traditional hosting model will continue to decline, with only 15% of organizations using dedicated hosting by 2027, down from 25% in 2024, as cloud-based IaaS and PaaS solutions become more prevalent.
Hosting providers will adapt their offerings to focus on managed services and specialized application hosting, rather than generic infrastructure provisioning.
By 2028, 60% of hosting providers will generate the majority of their revenue from managed services and PaaS-like solutions. Smaller organizations and those with specific application requirements that do not warrant a full cloud migration will continue to utilize hosting services, accounting for approximately 20% of the hosting market by 2029.
Infrastructure-as-a-Service (IaaS) Deployment
IaaS will experience rapid growth, with the global IaaS market projected to reach $200 billion by 2026, a 25% CAGR from 2021. This growth will be driven by the need for scalable, on-demand computing resources and the desire to offload infrastructure management.
By 2027, 60% of enterprises will utilize IaaS for at least one workload, with a focus on applications with variable usage patterns, the need for customization, and those requiring low latency or high-performance computing.
Concerns around data sovereignty, vendor lock-in, and the technical expertise required to manage IaaS environments will lead 35% of organizations to adopt a multi-cloud IaaS strategy by 2029, leveraging two or more cloud providers to mitigate these risks.
Platform-as-a-Service (PaaS) Deployment
PaaS adoption will grow at a 23% CAGR from 2021 to 2026, reaching a market size of $80 billion, as organizations seek to simplify application development and deployment.
By 2028, 50% of organizations will utilize PaaS for at least one application, driven by the need to focus on core business capabilities rather than infrastructure management and the desire for rapid, high-availability application delivery.
Concerns around vendor lock-in and the limitations of customization in PaaS environments will lead 45% of organizations using PaaS to adopt a hybrid approach, combining it with IaaS or on-premises infrastructure, by 2030.
Software-as-a-Service (SaaS) Deployment
SaaS will continue to dominate the cloud services market, with the global SaaS market expected to reach $307 billion by 2026, growing at an 11.7% CAGR from 2020. By 2027, over 70% of software will be delivered as a service, driven by the scalability, flexibility, and potential cost savings of the SaaS model, as well as the increasing user preference for cloud-based applications.
Concerns around data security, compliance, and the challenges of integrating SaaS applications with on-premises systems will lead 55% of organizations to adopt a multi-cloud SaaS strategy, utilizing multiple SaaS providers, by 2029.
Applications with low-latency requirements or extensive customization needs will remain less suited for the SaaS model, accounting for approximately 20% of enterprise software deployments by 2030.