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Public Cloud Spending Set For Strong Growth, US$195 B By 2020

Worldwide public cloud services spending is poised for strong growth in the coming years, International Data Corporation (IDC) figures show.

The IDC figures show worldwide revenues from public cloud services reaching more than US$195 billion in 2020, growing from US$96.5 billion forecast this year, at a compound annual growth rate of 20.4 per cent, 2015-2020.

Applications as a service and system infrastructure software as a service (combining to form SaaS) and application development and deployment (AD&D) or platform as a service (PaaS) accounted for 83.7 per cent of all public cloud revenue last year, with the remaining 16.3 per cent attributed to infrastructure as a service (IaaS).

The IDC, however, forecasts that IaaS and PaaS revenues will grow at a faster rate than SaaS, expanding their share of overall revenues.

“Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets,” Benjamin McGrath, IDC senior research analyst, SaaS and business models, commented.

“By 2020, about half of all new business software purchases will be of service-enabled software, and cloud software will constitute more than a quarter of all software sold.”

The discrete manufacturing, banking and professional services industries will represent nearly a third of total worldwide revenues in 2016, while the media, telecommunications and retail industries are poised to see the fastest revenue growth over the five-year forecast.

All 20 of the industries profiled in the IDC’s spending guide will experience revenue growth of more than 100 per cent over the forecast period.

“Cloud computing is breaking down traditional technology barriers as line of business leaders and their IT organisations rely on cloud to flexibly deliver IT resources at the lower cost and faster speed that businesses require,” Eileen Smith, IDC program director, customer insights and analysis, commented.

“Organisations across all industries are now free to adapt to market changes quicker and take more risks, as they are no longer bound by legacy IT constraints.”

The US will be the largest market for public cloud services for the forecast period, generating nearly two thirds of total worldwide revenues, followed by Western Europe and the Asia Pacific (excluding Japan) (APeJ).

Latin America and ApeJ will lead revenue growth over the forecast period, while all eight regions are forecast to record greater than 100 per cent revenue growth over the next five years.

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