Beancounters at IDC have added up some numbers, divided by their collective shoe size, and projected that worldwide expenditure on public cloud services will surge to $1.35 trillion by 2027.
While the pace of annual spending growth in the Public Cloud Services market is anticipated to experience a marginal decline during the period from 2023 to 2027, the market is predicted to achieve an impressive compound annual growth rate (CAGR) of 19.9 per cent over five years.
IDC Eileen Smith Program Vice President of Data & Analytics said organisations have widely adopted public cloud solutions as a cost-efficient means of hosting enterprise applications and facilitating the creation and deployment of consumer-centric solutions.
He said the cloud’s capacity to support innovation in application development and deployment remains paramount, especially as the forefront of innovation is shaped by data, artificial intelligence (AI), machine learning (ML), and edge computing.
Among the 28 industries outlined in the Spending Guide, Banking, Software and Information Services, and Telecommunications are anticipated to lead the pack in terms of public cloud services spending, collectively accounting for $326 billion by 2027.
Following suit are Retail and Professional and Personal Services, which are poised to become the next prominent industries in terms of spending, collectively contributing almost 36 percent to the top five industries’ combined share. Notably, Software and Information Services (24.0 percent CAGR), Capital Markets (21.9 percent CAGR), and Telecommunications (21.8 percent CAGR) are projected to be the industries experiencing the most rapid spending growth through 2027. Interestingly, with the exception of the
Consumer industry, all other industries are expected to deliver double-digit CAGRs throughout the 2023-2027 forecast period.
Cloud computing’s landscape is further delineated with the revelation that Software as a Service (SaaS) – Applications will dominate, constituting approximately 40 percent of total public cloud spending. However, SaaS – Applications is anticipated to experience the slowest growth over the forecast period, with a five-year CAGR of 15.8 percent. Key SaaS applications include enterprise resource management (ERM) and customer relationship management (CRM), followed by content workflow and management applications, as well as collaborative applications.
Infrastructure as a Service (IaaS) ranks as the second-largest category of public cloud spending, closely trailed by Platform as a Service (PaaS). PaaS is poised to be the most rapidly growing category, with an impressive five-year CAGR of 27.2 percent.
This growth is driven by investments in data management software, application platforms, analytics, and business intelligence software. Meanwhile, IaaS spending, which encompasses compute, storage, and networking devices, is projected to be the second-fastest growing category, boasting a CAGR of 23.5 percent.
The report sheds light on Software as a Service – System Infrastructure Software (SIS), which is slated to represent around 15 percent of the overall cloud market. In this category, security software emerges as the focal point of investment, rivaling spending in ERM within the SaaS applications category. Notably, physical and virtual computing software is anticipated to experience the most substantial growth among SIS products.
