Global spending on public cloud services reached US$45.7 billion last year and will experience a 23 percent compound annual growth rate through 2018, according to analyst firm IDC.
Some 86 percent of the 2013 total came from cloud software, which encompasses both SaaS (software as a service) applications and PaaS (platform as a service) offerings, with the remaining 14 percent generated by cloud infrastructure, IDC said Monday.
ERM (enterprise resource management) application software accounted for $10.8 billion in public cloud revenue last year, followed by CRM (customer relationship management) products with $8.1 billion, according to IDC. Server and collaboration software came next with about $4 billion and $3.4 billion, respectively, with the remainder of the total spread over security and other markets, IDC said.
Salesforce.com and ADP are the two largest SaaS vendors, followed by Intuit, Oracle and Microsoft, according to IDC's survey. That conclusion is in contrast with Oracle's recent claim to have become the industry's second-largest SaaS company.
ADP has long offered hosted services for payroll and other human resources functions. It generated more than $11 billion in revenue during its last fiscal year, and in 2011 made a big push into HCM (human capital management) with Vantage, a cloud-based suite.
An Oracle spokeswoman declined to comment on IDC's ranking.
Meanwhile, IDC ranked Amazon.com first in the PaaS market, with Salesforce.com and Microsoft tied for second place, followed by GXS and Google.
Amazon was also No. 1 in the infrastructure category, followed by Rackspace, IBM, CenturyLink and Microsoft.
Geographically, the U.S. accounts for 68 percent of the overall public cloud market, but this figure will fall to 59 percent by 2018 as Western Europe's take rises from 19 percent to 23 percent and growth picks up in emerging markets, IDC said.
While customer appetite for cloud software is one reason for the market's strong growth, another is simply the fact that traditionally on-premises vendors such as Oracle and SAP have now managed to build out broad SaaS portfolios to offer their customers. Cloud services account for relatively little of those companies' overall revenue right now, but that is sure to change over time.
Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com
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