Worldwide spending on public cloud services and infrastructure will reach $122.5 billion in 2017 -- that's an increase of 24.4 percent over 2016, according to the latest market study by International Data Corporation (IDC).
Over the 2015-2020 forecast period, overall public cloud spending will experience a 21.5 percent compound annual growth rate (CAGR) -- that's nearly seven times the rate of overall IT spending growth.
By 2020, IDC forecasts public cloud spending will reach $203.4 billion worldwide.
Public Cloud Market Development
Software as a Service (SaaS) will remain the market leader, capturing nearly two thirds of all public cloud spending in 2017 and roughly 60 percent in 2020. However, spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at much faster rates than SaaS, with five-year CAGRs of 30.1 percent and 32.2 percent, respectively.
"In 2017, discrete manufacturing, professional services, and banking will lead the pack in global spending on public cloud services as they look for greater scalability, higher performance, and faster access to new technologies," said Eileen Smith, program director at IDC. "Combined, these three industries will account for one third of worldwide public cloud services spending, or $41.2 billion."
The industries that will see the fastest growth in public cloud spending over the five-year forecast period are professional services (23.9 percent CAGR), retail (22.8 percent CAGR), media (22.5 percent CAGR), and telecommunications (22.1 percent CAGR).
Nearly half of all public cloud spending will come from very large businesses while medium-sized businesses will deliver more than 20 percent throughout the forecast. Large businesses will see the fastest growth with a five-year CAGR of 23.2 percent.
While purchase priorities vary somewhat depending on company size, the leading product categories include customer relationship management (CRM) and enterprise resource management (ERM) applications in addition to server and storage hardware.
The United States will be the largest market for public cloud services, generating more than 60 percent of total worldwide revenues. Western Europe and Asia-Pacific (excluding Japan) will be the second and third largest regions with 2017 spending levels of $24.1 billion and $9.5 billion, respectively.
Outlook for Public Cloud Application Growth
In Western Europe, the public cloud market will grow at a healthy 23.2 percent CAGR over the forecast period and utilities, insurance, and professional services industries will be the most dynamic market spaces.
European companies have been slower in the adoption of cloud when compared to their U.S. counterparts, but now the market is maturing and it is the right time for cloud providers to target and capture the untapped segments.
"The cloud will become more distributed (through IoT edge services and multi-cloud services), more trusted, more intelligent, more industry and workload specialized, and more channel mediated. As the cloud evolves these important new capabilities and use cases for the cloud will dramatically expand," added Frank Gens, senior vice president and chief analyst at IDC.
Over the 2015-2020 forecast period, overall public cloud spending will experience a 21.5 percent compound annual growth rate (CAGR) -- that's nearly seven times the rate of overall IT spending growth.
By 2020, IDC forecasts public cloud spending will reach $203.4 billion worldwide.
Public Cloud Market Development
Software as a Service (SaaS) will remain the market leader, capturing nearly two thirds of all public cloud spending in 2017 and roughly 60 percent in 2020. However, spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at much faster rates than SaaS, with five-year CAGRs of 30.1 percent and 32.2 percent, respectively.
"In 2017, discrete manufacturing, professional services, and banking will lead the pack in global spending on public cloud services as they look for greater scalability, higher performance, and faster access to new technologies," said Eileen Smith, program director at IDC. "Combined, these three industries will account for one third of worldwide public cloud services spending, or $41.2 billion."
The industries that will see the fastest growth in public cloud spending over the five-year forecast period are professional services (23.9 percent CAGR), retail (22.8 percent CAGR), media (22.5 percent CAGR), and telecommunications (22.1 percent CAGR).
Nearly half of all public cloud spending will come from very large businesses while medium-sized businesses will deliver more than 20 percent throughout the forecast. Large businesses will see the fastest growth with a five-year CAGR of 23.2 percent.
While purchase priorities vary somewhat depending on company size, the leading product categories include customer relationship management (CRM) and enterprise resource management (ERM) applications in addition to server and storage hardware.
The United States will be the largest market for public cloud services, generating more than 60 percent of total worldwide revenues. Western Europe and Asia-Pacific (excluding Japan) will be the second and third largest regions with 2017 spending levels of $24.1 billion and $9.5 billion, respectively.
Outlook for Public Cloud Application Growth
In Western Europe, the public cloud market will grow at a healthy 23.2 percent CAGR over the forecast period and utilities, insurance, and professional services industries will be the most dynamic market spaces.
European companies have been slower in the adoption of cloud when compared to their U.S. counterparts, but now the market is maturing and it is the right time for cloud providers to target and capture the untapped segments.
"The cloud will become more distributed (through IoT edge services and multi-cloud services), more trusted, more intelligent, more industry and workload specialized, and more channel mediated. As the cloud evolves these important new capabilities and use cases for the cloud will dramatically expand," added Frank Gens, senior vice president and chief analyst at IDC.