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CCI
Thursday, 04 February 2016 01:34

Public cloud services spending forecast to double by 2019

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A new analyst estimate shows public cloud spending doubling to $80 billion by 2019 with spending on IaaS and PaaS growing faster than SaaS

According to the new Worldwide Semiannual Public Cloud Services Spending Guide from analysts IDC, worldwide spending on public cloud services will grow at a 19.4% compound annual growth rate (CAGR) -- almost six times the rate of overall IT spending growth – from nearly $70 billion in 2015 to more than $141 billion in 2019.

Software as a Service (SaaS) will remain the dominant cloud computing type, capturing more than two thirds of all public cloud spending through most of the forecast period. Worldwide spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 27.0% and 30.6%, respectively.

From a company size perspective, large and very large companies will be the primary driver of worldwide public cloud services with spending of more than $80 billion in 2019. However, small and medium businesses (SMBs) will remain a significant contributor to overall spending with more than 40% of the worldwide total throughout the forecast period coming from companies with fewer than 500 employees.

The industries with the largest public cloud services expenditures in 2015 were discrete manufacturing at $8.6 billion, followed by banking and professional services at $6.8 billion and $6.6 billion, respectively. By 2019, professional services is forecast to move ahead of banking into the number 2 position worldwide. These three industries were also the public cloud services spending leaders in the Americas and in Europe, Middle East, and Africa (EMEA) in 2015. However, telecommunications was the second largest industry in the Asia/Pacific region and is forecast to move into the top position by 2019.

Telecommunications will be the fastest-growing vertical industry over the 2014-2019 forecast period with a worldwide CAGR of 22.2%. The following industries will also experience five-year CAGRs greater than 20%: media, state/local government, education, retail, transportation, and resource industries.

"Over the past several years, the software industry has been shifting to a cloud-first (SaaS) development and deployment model. By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base," said Frank Gens, Senior Vice President & Chief Analyst at IDC. "This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud."

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