A new forecast from IDC calls for global public cloud spending to increase at an average 21% compound annual growth rate (CAGR) from 2016-2021 to reach $266 billion by the end of the forecast period, The data came from IDC’s “Worldwide Semiannual Public Cloud Services Spending Guide.”
IDC expects 2017 public cloud services spending will total $128.7 billion, a 25.4% year-to-year increase from 2016. IDC forecasts growth rates to slow somewhat for the market overall over the five-year forecast period.
Sales in the U.S. will set the pace, accounting for more than 60% of worldwide revenues throughout the forecast period, with total spending on public cloud services and infrastructure rising to $163 billion in 2021, the market research company highlights.
Overall, IDC expects five-year average CAGRs will exceed 20% in six of the eight world regions surveyed in the next five years.
Industries and Applications
Among industry sectors, the market research provider expects utilities, discrete manufacturing, insurance and professional services businesses to spend the most on public cloud services and infrastructure.
“Professional services, banking, and telecommunications are the three fastest growing industries worldwide over the forecast period, with banking and professional services also among the top 3 largest industries for worldwide spending on public cloud services,” said Eileen Smith, IDC program director, Customer Insights and Analysis. “Much of the public cloud services growth in these industries is coming from new projects and initiatives from functional areas like customer service and sales.”
Technologically, software-as-a-service (SaaS) will continue to dominate, accounting for two-thirds of public cloud services and infrastructure spending globally in 2017 and nearly 60% in 2021, according to IDC. Within the segment, application services will generate the bulk of revenues, making up more than half of all public cloud spending through 2019.
Customer relationship management (CRM) applications and enterprise resource management (ERM) applications will account for more than 60% of all cloud application spending over the course of the forecast period.
Spending on infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will grow much faster than SaaS, rising at CAGRs of 30.0% and 29.7% in the next five years, however, according to IDC.
Very large businesses with more than 1,000 employees will make up more than half of overall global public cloud spending, IDC said. Medium-sized businesses (100-499 employees) will account for about 20%.
Public cloud services and infrastructure spending will be fastest among large businesses (500-999 employees), rising at a 22.8% CAGR, IDC said.