International Data Corporation expects the western European private cloud market to grow at a rate of 23.2 per cent for the next five years to $7.9 billion in 2016, according to an industry-first study looking in-depth at private cloud from hardware, software, services, and networking points of view.

“The growth of private cloud is even more impressive in the context of the economic situation,” said Mette Ahorlu, research director, IDC European Services. “It’s driven by the need for cost savings and efficiency and with a longer perspective of creating increased flexibility, and is across the board – from hardware, to software, to management, networking and services. Creating a private cloud has an impact on all aspects of IT infrastructure.”

The study revealed how most enterprises in western Europe are still in early phases of cloud adoption, typically testing out cloud and perhaps rolling out one or a few cloud services to the full range of relevant users, but not deploying cloud on a really large scale.

There is growing interest in pre-packaged private clouds, pre-configured with servers, storage, network and management that speed up implementation and reduce need for services.

The cloud computing approach is to become a critical part of the IT strategy for the majority of organisations in Europe, the Middle East and Africa in the next two to three years. While security, compliance and data location are barriers to public cloud they become drivers for the adoption of the private cloud.

Partnering between technology companies and service companies is important to help create transparency in a complex market where clients think there are too many moving parts.

Hosted private cloud is not nearly as popular as clouds on customers’ premises, but hosted private cloud will grow even faster and revenue will exceed on-premises clouds by 2016

While the market is serviced by traditional IT providers and outsourcing companies, telecom providers have also seen it as a great opportunity to expand their businesses.

Cloud is fundamentally a network-based offering, it ‘commoditises’ well, and scales to a mass market customer base. It builds on the kind of support and billing relationships that telcos are used to, IDC’s report said.