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Virtualization and Cloud Markets Virtually the Same Size

On Oct. 6, I got a market-sized notice from the Market Intel Group arguing that in five years, the cloud market will exceed $300 billion. Thirteen days later, I got a market-sized notice from the Market Intel Group arguing that in five years, the virtualization market will exceed $250 billion. I know these markets are intertwined but had no idea they were so similar.

Here's the logic: On the cloud side, the company argues that lower costs due to economies of scale will drive market growth. The virt market will expand at a compound annual growth rate of 8.6 percent over the next five years. The company argues that much of this expansion will come from desktop virtualization, which is in its infancy. It also believes that the further preponderance of server virtualization will shrink demand for physical servers.

The markets, based on these predictions, are remarkably similar. But virtualization is fairly mature, which is why it will only grow less than 9 percent per year. The cloud is expected to rain fire, with average growth of 23.4 percent.

Posted by Doug Barney on 10/25/2011 at 12:47 PM


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