Public Cloud Growth to Surge

Overall, Forrester's report, "Sizing the Cloud", predicts that the global market for cloud computing -- including the public cloud, the private cloud and the virtual private cloud -- will leap from $40.7 billion this year to more than $241 billion in 2020.

Growth forecast: IaaS provides computing power, storage and archiving to a company with a utility pricing and delivery model. That is, you hand over all of your IT infrastructure to a cloud provider, only pay for the cloud services you use, and potentially save a lot of money

"Our analysis shows that IaaS will reach a peak of $5.9 billion in global earnings in 2014 and will at the time enter a period of significant commoditization, price deterioration and margin pressure," writes Forrester report authors Stefan Ried, Ph.D. and Holger Kisker, Ph.D.

"Between 2014 and 2020, as a result, the IaaS market will first stagnate and at the time decline, with total market earnings of $4.8 billion in 2020."

Growth forecast: PaaS is the middleware of the cloud, a place where you can design, test and deploy applications over the Web and eliminate the manual effort and cost of buying the underlying hardware, software and network capacity.

PaaS Vendors: Caspio, Cordys, Salesforce's Force.com, Google App Engine, Heroku, LongJump, Microsoft, OrangeScape Technologies, Tibco, WaveMaker Software, WorkExpress.

Growth forecast: SaaS refers to when the software applications themselves, just as CRM or ERP, are hosted by a cloud provider and made available to clients over the Internet. It is the largest public cloud category out and away.

Total earnings for SaaS in 2011 will reach $21.2 billion, and due to strong demand from companies of all sizes Forrester predicts that SaaS earnings will reach $92.8 billion by 2016, accounting for 26 percent of the total packaged software market.

Shane O'Neill covers Microsoft, Windows, Operating Systems, Productivity Apps and Online Services for CIO.com. Follow Shane on Twitter @smoneill. Follow everything from CIO.com on Twitter @CIOonline and on Facebook. Email Shane at soneill@cio.com