Who’s spending on public cloud services and infrastructure

Public Cloud forecast for CIOsSpending on public cloud services and infrastructure is forecast to grow 23.2 percent to reach $160 billion in 2018, according to IDC.

Annual spending growth on public cloud services and infrastructure is expected to slow over the 2016-2021 forecast period.

The public cloud services and infrastructure market is forecast to achieve a 5-year compound annual growth rate (CAGR) of 21.9 percent with public cloud services spending totaling $277 billion in 2021.

Discrete manufacturing will be spending $19.7 billion on public cloud services in 2018.

Professional services will be spending $18.1 billion on public cloud services.

Banking sector will be spending $16.7 billion towards public cloud services.

Process manufacturing and retail industries are expected to spend more than $10 billion each on public cloud services in 2018.

Professional services (24.4 percent CAGR), telecommunications (23.3 percent CAGR), and banking (23.0 percent CAGR) will see the fastest spending growth over the five-year forecast period.

“Discrete manufacturing, professional services, and banking organizations are leveraging public cloud services to quickly develop and launch 3rd Platform solutions, such as big data and analytics and the Internet of Things (IoT), that will enhance and optimize the customer’s journey and lower operational costs,” said Eileen Smith, program director, Customer Insights and Analysis at IDC.

Software as a Service (SaaS) will be the largest cloud computing category, capturing nearly two thirds of all public cloud spending in 2018. SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be dominated by applications purchases, which will make up more than half of all public cloud services spending through 2019.

IDC said enterprise resource management (ERM) applications and customer relationship management (CRM) applications will see the most spending in 2018, followed by collaborative applications and content applications.

Infrastructure as a Service (IaaS) will be the second largest category of public cloud spending in 2018, followed by Platform as a Service (PaaS). IaaS spending will be fairly balanced throughout the forecast with server spending trending slightly ahead of storage spending.

IDC said PaaS spending will be led by data management software, which will see the fastest spending growth (38.1 percent CAGR) over the forecast period.

Application platforms, integration and orchestration middleware, and data access, analysis and delivery applications will also see healthy spending levels in 2018 and beyond.

The United States will be the largest country market for public cloud services in 2018 with its $97 billion accounting for more than 60 percent of worldwide spending.

The United Kingdom and Germany will lead public cloud spending in Western Europe at $7.9 billion and $7.4 billion respectively, while Japan and China will round out the top 5 countries in 2018 with spending of $5.8 billion and $5.4 billion, respectively.

China will experience the fastest growth in public cloud services spending over the five-year forecast period (43.2 percent CAGR), enabling it to leap ahead of the UK, Germany, and Japan into the number 2 position in 2021. Argentina (39.4 percent CAGR), India (38.9 percent CAGR), and Brazil (37.1 percent CAGR) will also experience particularly strong spending growth.

Discrete manufacturing, professional services, and banking industries will account for roughly one third of all U.S. public cloud services spending this year.

Banking, retail, and discrete manufacturing will provide more than 40 percent of all public cloud spending in UK in 2018.

Discrete manufacturing, professional services, and process manufacturing will account for more than 40 percent of public cloud spending in Germany.

Professional services, discrete manufacturing, and process manufacturing industries will deliver more than 43 percent of all public cloud services in Japan.

Professional services, discrete manufacturing, and banking industries will represent more than 40 percent of China’s public cloud services spending in 2018.

Digital transformation is driving multi-cloud and hybrid environments for enterprises to create a more agile and cost-effective IT environment in Asia Pacific.

“Drivers of IaaS growth in the region include the increasing demand for rapid processing infrastructure, as well as better data backup and disaster recovery,” said Ashutosh Bisht, research manager, Customer Insights and Analysis.

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