Enterprises will be spending $805 billion on public cloud services in 2024 and the spending will double in size by 2028, according to IDC forecast.
The public cloud services market is forecast to achieve a five-year CAGR of 19.4 percent, IDC’s Software and Public Cloud Services Spending Guide indicated.
“Cloud dominates tech spending across infrastructure, platforms, and applications,” said Eileen Smith, group vice president, Data & Analytics at IDC. “Most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications and for developing and deploying customer-facing solutions.”
Banking, Software and Information Services, and Retail together will be spending $190 billion in public cloud services in 2024.
Telecommunications, Media and Entertainment, Capital Markets, Healthcare Provider, and Professional and Personal Services will each account for more than 5 percent of public cloud spending.
The industries that will see the fastest spending growth through 2028 are Capital Markets, Life Sciences, and Insurance (all around 23 percent CAGR). Every industry except Consumer will deliver double-digit CAGRs over the 2023-2028 forecast period.
“With organizations building, testing, and deploying AI platforms, the growing interdependence between AI innovation and cloud infrastructure is positioning cloud services as the backbone of AI development and deployment,” said Andrea Minonne, research manager, Data & Analytics at IDC.
Software as a Service (SaaS) – Applications will be the largest category of cloud computing, capturing more than 40 percent of all public cloud spending in 2024. The SaaS – Applications category will grow at five-year CAGR of 16.5 percent. Enterprise resource management (ERM), customer relationship management (CRM), content workflow and management applications and collaborative applications are the leading SaaS applications.
Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) will each deliver nearly 20 percent of all public cloud spending in 2024, separated by less than $1 billion. PaaS will be the fastest growing category, led by Data Management Software. Artificial Intelligence Platforms will grow at a five-year CAGR of 51.1 percent. IaaS spending, comprised of compute, storage, and networking devices, will be the second fastest growing category.
SaaS – System Infrastructure Software (SIS) will account for 16 percent of the cloud spending market. Security software will be the largest area of investment in SIS category. Security software spending will be on par with ERM and CRM spending in the SaaS applications category. Physical and virtual computing software will see the fastest spending growth among the SIS products.
