​Public cloud powers ahead as businesses splash the cash

​Public cloud powers ahead as businesses splash the cash

Investments at nearly seven times the rate of overall IT spending growth as SaaS dominates.

Worldwide spending on public cloud services and infrastructure will reach US$122.5 billion in 2017, representing an increase of 24.4 per cent over 2016.

As enterprises across the world increase investment, overall public spending is expected to surge 21.5 per cent by 2020, nearly seven times the rate of overall IT spending growth.

By 2020, IDC research forecasts public cloud spending will reach US$203.4 billion worldwide.

Software-as-a-Service (SaaS) will remain the dominant cloud computing type, capturing nearly two thirds of all public cloud spending in 2017 and roughly 60 per cent in 2020.

According to IDC, SaaS spending, which is comprised of applications and system infrastructure software (SIS), will in turn be dominated by applications purchases, which will make up more than half of all public cloud spending throughout the forecast period.

However, spending on Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) will grow at much faster rates than SaaS with five-year increases of 30.1 per cent and 32.2 per cent, respectively.

“In 2017, discrete manufacturing, professional services, and banking will lead the pack in global spending on public cloud services as they look for greater scalability, higher performance, and faster access to new technologies,” IDC Program Director of Customer Insights and Analysis, Eileen Smith, said.

“Combined, these three industries will account for one third of worldwide public cloud services spending, or US$41.2 billion.”

Smith said the industries that will see the fastest growth in public cloud spending over the five-year forecast period are professional services (23.9 per cent), retail (22.8 per cent), media (22.5 per cent), and telecommunications (22.1 per cent).

It is worth noting, however, that 18 of the 20 industries included in the IDC Spending Guide will experience five-year increases of adoption greater than 20 per cent.

In terms of company size, nearly half of all public cloud spending will come from very large businesses (those with more than 1,000 employees) while medium-sized businesses (100-499 employees) will deliver more than 20 per cent throughout the forecast.

Large businesses (500-999 employees) will see the fastest growth with a five-year increase of 23.2 per cent.

While purchase priorities vary somewhat depending on company size, the leading product categories include customer relationship management (CRM) and enterprise resource management (ERM) applications in addition to server and storage hardware.

On a geographic basis, Asia Pacific (excluding Japan)(APeJ) will be third largest region with 2017 spending levels reaching US$9.5 billion, with a 28 per cent increase in spend predicted by 2020.

“As cloud adoption expands over the next four years, what clouds are and what they can do will evolve dramatically - in several important ways,” IDC Senior Vice President and Chief Analyst, Frank Gens, added.

“The cloud will become more distributed (through Internet of Things edge services and multi-cloud services), more trusted, more intelligent, more industry and workload specialised, and more channel mediated.

“As the cloud evolves these important new capabilities - what IDC calls 'Cloud 2.0' - the use cases for the cloud will dramatically expand.”

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