Spending on public cloud in APeJ to grow at 22.9% CAGR

According to the new Worldwide Semiannual Public Cloud Services Spending Guide from International Data Corporation (IDC), spending on public cloud services in the Asia Pacific region excluding Japan (APeJ) will grow at a 22.9% CAGR – almost six times the rate of overall IT spending growth – from nearly US$7 billion in 2015, more than doubling to US$15 billion in 2019. This is faster than the estimated CAGR for the worldwide cloud services spending for the same forecast period, of 19.4%.

APeJ spending on infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) will grow at a faster rate than software-as-a-service (SaaS) with five-year CAGRs of 28.9% and 21.2%, respectively. SaaS will still remain the dominant cloud computing type until 2019, when it will be overtaken by IaaS spending. Meanwhile, IaaS will comprise nearly 50% of all public cloud spending by 2019. However, through the forecast period, SaaS will maintain a 17.6% CAGR.

"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 Chris Morris, Vice President for Cloud Services Research at IDC Asia Pacific.

"This means that many enterprise software customers will be offered SaaS as the preferred option as they reach their next major software upgrade decisions. 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."

The industries in APeJ with the largest public cloud services expenditures in 2015 were discrete manufacturing at US$955 million, followed by telecommunications and banking at US$928 million and US$744 million, respectively. Telecommunications will be the fastest-growing vertical industry over the 2014 to 2019 forecast period with a CAGR of 29.2% in APeJ. It is expected to move ahead of discrete manufacturing into the No. 1 position in APeJ by 2019.

On the other hand, banking and telecommunications are the public cloud services spending leaders in the Americas, Europe, Middle East, and Africa (EMEA) in 2015. By 2019, the top three spending industries will include professional services.

"Cloud services will remain the essential foundation of the IT industry's 3rd Platform of innovation and growth. As the cloud market enters an innovation stage, there will be an explosion of new solutions and value creation on top of the cloud," said Rubal Sabharwal, Research Manager for Customer Insights and Analysis in IDC APeJ.

"Industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements. With the huge increase in the number and diversity of services available in the market, organisations across the industries will shift steadily toward cloud-first strategies to enable digital transformation."

Interested?

Read the TechTrade Asia blog post on IDC's worldwide public cloud spending forecast

The Worldwide Semiannual Public Cloud Services Spending Guide quantifies public cloud computing purchases by cloud type for 20 industries across eight regions and 54 countries.