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Private cloud storage market could be worth $70 billion by 2018

The private cloud market has solid growth prospects.

Enterprises will heavily invest in private cloud storage solutions for the rest of the decade, with adoption resulting in record revenue for vendors by 2018. Companies appear keen to address the security and performance gaps that they have experienced with public cloud services. At the same time, they increasingly regard the private cloud as a mature solution in its own right.

Technology Business Research conducted a survey of 650 cloud users and estimated that private cloud revenue would reach nearly $70 billion within five years. Many enterprises are seeking to move additional workloads to private infrastructure. TBR's respondents averaged only four private cloud workloads in 2013, but the figure is predicted to increase 29 percent year-over-year.

Applications such as HR and CRM software may be the easiest workloads for enterprises to move to the private cloud. However, vendors will need to provide assistance as IT departments think about setting up complex projects such as ERP and big data analytics.

"Private cloud has truly come into its own as a delivery mechanism that customers understand and are using to achieve the benefits of cloud where public options are either not available or viable," stated Lead Cloud Practice Analyst Allan Krans. "It's an interesting space because the vendor landscape is so diverse and should evolve tremendously as offerings, regulations and open standards play out over the coming years."

The rapid adoption of private clouds has had particular impact on sectors such as government IT. MarketsandMarkets recently estimated that the government cloud market would be worth more than $18 billion by 2018, with private cloud computing services constituting the bulk of investments. Agencies are seeking to trim hardware and IT costs while maintaining a high level of security and control over data.