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Public cloud powers ahead as enterprise splashes the cash

James Henderson | Feb. 22, 2017
Worldwide cloud spending will be up by more than 24 percent in 2017, IDC says

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

As enterprises across the world increased investment, overall public spending is expected to surge 21.5 percent 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 percent 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 percent), retail (22.8 percent), media (22.5 percent), and telecommunications (22.1 percent).

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 percent.

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 percent 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 the third largest region with 2017 spending levels reaching US$9.5 billion, with a 28 percent 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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