Public IT cloud services to grow at a CAGR of 23.5% over next four years

Public IT cloud services will grow at a compound annual growth rate (CAGR) of 23.5 percent, five times that of the IT industry as a whole, over 2013–2017, IDC said.

In 2013, worldwide spending on public IT cloud services will reach $47.4 billion and is expected to be more than $107 billion in 2017.

By 2017, IDC expects public IT cloud services will drive 17 percent of IT product spending and nearly half of all growth across five technology categories: applications, system infrastructure software, platform as a service (PaaS), servers, and basic storage.

Software as a service (SaaS) will remain the largest public IT cloud services category throughout the forecast, capturing 59.7 percent of revenues in 2017. The fastest growing categories will be PaaS and Infrastructure as a service (IaaS), with CAGRs of 29.7 percent and 27.2 percent, respectively, IDC said.


The United States will remain the largest public IT cloud services market, although its share will decline from 56.9 percent in 2013 to 43.9 percent in 2017 while Western Europe, Latin America, and Asia/Pacific will each gain share throughout the forecast.

Cloud spending in emerging markets is expected to experience a CAGR of 37.3 percent for the 2013-2017 period, a rate almost twice that of developed markets.

Cloud computing, a key technology that enables the industry-wide shift to the 3rd platform, has played a crucial role in changing the way companies consume and use information technology. The first wave of cloud services adoption was focused on improving the efficiency of the IT department.

cloud forecast IDC

Cloud services are starting to shift into the next face where the scale of cloud adoption will not only be much bigger, but also more user and solution driven. In this phase of growth, cloud and other 3rd Platform technologies – mobile, social, and Big Data – will become even more interdependent as they continue to drive growth and innovation across all industries that depend on IT.

Over the next several years, primary driver for cloud adoption will shift from economics to innovation. Leading companies are investing in cloud technologies to deliver competitive offerings. The emergence of cloud as the core for new ‘business as a service’ offerings will accelerate cloud adoption and dramatically raise the cloud model’s strategic value beyond CIOs to CXOs of all types.

The expanding variety of cloud deployment options is driving the growth of public IT cloud services. The emergence of virtual private cloud (VPC) offerings has helped to shift momentum from dedicated private cloud offerings toward public (shared/multi-tenant) cloud offerings.

Growing commoditization and competition is expected to bring about consolidation in basic cloud services such as infrastructure as a service (IaaS) offerings. This will force vendors to expand their offerings toward higher value services.

The growing focus on cloud services as a business innovation platform will help drive spending on public IT cloud services to new levels throughout the forecast period.

IDC urges cloud service providers to reexamine their cloud strategies preparing for a marketplace focused intensely on business innovation, industry transformation, and increasingly pressured pricing and operating models.

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