Dive Brief:

• This year, analysis firm Gartner predicts the worldwide market for public cloud systems overall will reach $204 billion, according to a CIO report. 
• The expected growth is a 16.5% increase over 2015's $175 billion market.
• In 2016, Infrastructure as a Service (IaaS) is expected to grow more than 38%, potentially reaching $22.4 billion by the end of the year, according to Gartner. 

Dive Insight:

Cloud services are one of the fastest growing segments of IT, reflecting the transition away from legacy to cloud-based IT services as organizations pursue a "digital business strategy," Gartner said. 

Right now,  IaaS area of cloud is experiencing the largest demand.

"IaaS continues to be the strongest-growing segment as enterprises move away from data center build-outs and move their infrastructure needs to the public cloud," said Sid Nag, research director at Gartner, in a statement. "Certain market leaders have built a significant lead in this segment, so providers should focus on creating differentiation for success."

Gartner predicts cloud application services will see more than 20% year-over-year growth, followed by cloud management, security services and cloud application infrastructure services.

AWS, Microsoft and Google – currently the three big players in public cloud computing – have been competing fiercely to gain new customers by offering lower prices or enhanced features.