In the first half of 2023, India’s public cloud services (PCS) market, encompassing infrastructure, platform, and software services, hit a revenue milestone of $3.8 billion, according to the latest report by the International Data Corporation (IDC).
IDC’s Worldwide Semi-annual Public Cloud Services Tracker foresees a meteoric rise, projecting the overall Indian PCS market to soar to a staggering $17.8 billion by 2027. The anticipated growth stands at a robust Compound Annual Growth Rate (CAGR) of 22.9 percent between 2022 and 2027.
Rajiv Ranjan, Associate Research Director for Cloud and Artificial Intelligence at IDC India, highlighted the burgeoning trend within Indian enterprises. “Investments in GenAI, chatbots, and conversational AI tools are escalating,” Ranjan stated, specifying GenAI tools’ application in cost optimization, application development, and workload testing.
The report further underlined the dominance of Software-as-a-Service (SaaS) as the leading segment within the public cloud services market, trailed by Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) in the 1H2023 period. Notably, the top two public cloud service providers continue to command over 40 percent of the market share.
Major cloud service providers are significantly upping their stakes in India, signaling their confidence in the country’s burgeoning market potential. While traditional segments like IaaS, collaborative applications, Customer Relationship Management (CRM), and Enterprise Resource Management (ERM) persist as growth drivers, providers are experiencing a surge in demand for AI and data management offerings. This surge signifies a shifting landscape and evolving needs within cloud service provisions.
Harish Krishnakumar, Senior Market Analyst for Enterprise IT Services & Cloud at IDC India, emphasized the accelerating shift towards an ‘as-a-service’ consumption model driven by a focus on cost optimization. Krishnakumar anticipates robust and sustained demand for public cloud services, particularly as GenAI gains further traction in the coming years.
