The worldwide cloud services market is estimated to grow 19.6 percent in 2012 to surpass the $109-billion mark, according to a new report by Gartner.

The report said that business process services (also known as business process as a service or BPaaS) represent the largest segment, accounting for about 77 percent of the total market, while infrastructure as a service (IaaS) is the fastest-growing segment of the public cloud services market and is expected to grow 45.4 percent in 2012.

"The cloud services market is clearly a high-growth sector within the overall IT marketplace," said Ed Anderson, research director at Gartner. "The key to taking advantage of this growth will be understanding the nuances of the opportunity within service segments and geographic regions, and then prioritizing investments in line with the opportunities."

According to Gartner, BPaaS is the largest segment mainly because of the inclusion of cloud advertising as a subsegment. The segment is projected to grow to $84.2 billion in 2012, up from $72 billion in 2011. In 2011, cloud advertising represented about 47 percent of the total public cloud services market, making it the biggest identifiable subsegment in the forecast.

Through 2016, cloud advertising would continue to account for about 47 percent of total public cloud services spending, the market research firm added.

When it comes to software as a service (SaaS), it is the next-largest segment and is forecast to grow to $14.4 billion in 2012 while IaaS is forecast to grow from $4.3 billion in 2011 to $6.2 billion in 2012.

In 2010, the IaaS market was less than one-third the size of the SaaS market. By 2016, the IaaS market will grow to almost equal the size of the SaaS market.

Gartner predicted that application infrastructure services (also known as platform as a service, or PaaS) will also be high although it is a smaller market compared to the other segments.

The PaaS segment is forecast to grow to $1.2 billion in 2012. Cloud management and security services constitute a new forecast segment comprising cloud security services, IT operations management (ITOM) and storage management (including backup and recovery services). The cloud management and security services segment is forecast to grow to $3.3 billion in 2012.

Although North America is the largest region and is expected to produce the largest absolute increase in market size, Gartner expected the highest regional growth rates in emerging Asia/Pacific (including India and Indonesia), greater China, Eurasia (including Russia) and Latin America (including Argentina, Mexico and Brazil).

On the other hand, Western Europe is estimated to grow the slowest during the forecast period, largely due to the ongoing euro zone economic issues. In addition, growth will also be lower in mature Asia/Pacific markets because of current economic challenges in the Japanese market.

North America will account for the greatest percentage of absolute growth in the cloud services market, with 61 percent of all growth from 2010 through 2016, according to the report.

Though high growth rates will occur in the emerging markets, including the top three growth countries of India, Indonesia and China, as many as 79 percent of spending increases will come from North America and Western Europe.

"The total public cloud services market size in 2011 was $91.4 billion, and it will grow to $206.6 billion in 2016," said Anderson.

Russia China India Argentina