Dive Brief:

• The global market for public cloud services increased by 28.6% year-over-year during the first half of 2017, according to an IDC report. Revenues grew to $63.2 billion compared to $49.1 billion in the first half of 2016. 
• The SaaS segment of cloud services accounts for 68.7% of the market share, yet the market has the slowest growth compared to PaaS and IaaS. PaaS, which only accounts for 13.6% of the cloud market share, grew 50.2% year-over year. By comparison, the SaaS market only grew 22.9% year-over-year. 
• The IaaS segment held 17.8% of the market share during the first half of the year and had a 38.1% year-over-year growth. AWS is currently the leader in IaaS, according to the report. 

Dive Insight:

Traditional, non-cloud infrastructure spending is expected decline by 4.6% in 2017 as the cloud takes center stage. By 2021, spending in the public cloud services market is set to reach $266 billion. The U.S. is expected to account for 60% of that spending, or $163 billion.

It is no surprise that IaaS and PaaS are outpacing SaaS as companies look to integrate more personalized technologies. Companies reluctant to transition entirely to the cloud often look to hybrid-cloud offerings.

However, the SaaS market is already well-established and most companies have enterprise software integrated into systems. Additionally, the software market is much more diverse, used by both broad and niche-based vendors, making its growth slow but steady. 

As of now, companies use about 16 SaaS applications on a daily basis, which is an increase of 33% from 2016. As mobility takes the forefront of managing workloads, companies have no option but to offer storage and service models to accommodate employees.

At this point, AWS remains the leader in IaaS but its 45.9% year-over-year growth was outpaced by Microsoft's 61.1% and Alibaba's staggering 126.5% during the same time. Microsoft, however, still leads in SaaS followed by competitors including Salesforce and SAP during Q2 of 2017.