Public Cloud Services Spending Will More Than Double by 2023
Worldwide spending on public cloud services and infrastructure will more than double over the 2019-2023 forecast period, according to IDC. With a five-year compound annual growth rate (CAGR) of 22.3%, public cloud spending will grow from $229 billion in 2019 to nearly $500 billion in 2023.
"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.
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. 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). 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). IaaS spending, comprised of servers and storage devices, will also be the fastest growing category of cloud spending with a five-year CAGR of 32.0%. PaaS spending will grow nearly as fast (29.9% CAGR) led by purchases of data management software, application platforms, and integration and orchestration middleware.
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. On a geographic basis, the United States 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.