The market intelligence company’s latest growth figure, which represents a five-year compound annual growth rate (CAGR) of 22.3%, comes from an update to its Worldwide Semiannual Public Cloud Services Spending Guide, which quantifies public cloud computing purchases by cloud type for 79 technologies, 20 industries, and five company sizes across nine regions and 53 countries.
Software as a Service (SaaS) will be the largest category of cloud computing, capturing more than half of all public cloud spending in throughout the forecast, according to IDC.
Another research firm, Synergy Research Group, recently found that the first quarter of the SaaS market in 2019 generated over $23 billion and is set to reach $100 billion annual run rate in its current quarter.
IDC added in its report that SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be “dominated” by applications purchases.
“The leading SaaS applications will be customer relationship management (CRM) and enterprise resource management (ERM),” IDC stated. “SIS spending will be led by purchases of security software and system and service management software.”
Infrastructure as a Service (IaaS) will be the second largest category of public cloud spending throughout the forecast, followed by Platform as a Service (PaaS), according to IDC, which found that IaaS spending, comprised of servers and storage devices, will also be the fastest growing category of cloud spending with a five-year CAGR of 32%.
PaaS spending will grow nearly as fast (29.9% CAGR) led by purchases of data management software, application platforms, and integration and orchestration middleware.
IDC has found that three industries – professional services, discrete manufacturing, and banking – will account for more than one third of all public cloud services spending throughout the forecast.
“While SaaS will be the leading category of investment for all industries, IaaS will see its share of spending increase significantly for industries that are building data and compute-intensive services,” stated IDC. “For example, IaaS spending will represent more than 40% of public cloud services spending by the professional services industry in 2023 compared to less than 30% for most other industries. Professional services will also see the fastest growth in public cloud spending with a five-year CAGR of 25.6%.”
On a geographic basis, IDC has revealed that the US will be the largest public cloud services market, accounting for more than half the worldwide total through 2023. Western Europe will be the second largest market with nearly 20% of the worldwide total.
China will experience the fastest growth in public cloud services spending over the five-year forecast period with a 49.1% CAGR. Latin America will also deliver “strong” public cloud spending growth with a 38.3% CAGR, according to IDC.
"Adoption of public (shared) cloud services continues to grow rapidly as enterprises, especially in professional services, telecommunications, and retail, continue to shift from traditional application software to software as a service (SaaS) and from traditional infrastructure to infrastructure as a service (IaaS) to empower customer experience and operational-led digital transformation (DX) initiatives," said Eileen Smith, program director, Customer Insights and Analysis.
According to a new study by Gartner, three-quarters of all databases will be deployed or migrated to a cloud platform by 2022, with only 5% ever considered for repatriation to on-premises.
