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How China Leads Public Cloud Services Growth

The ongoing shift to cloud computing continues across the globe. The worldwide public cloud services market grew 28.6 percent year-over-year in the first half of 2017 (1H17) with revenues totaling $63.2 billion, according to the latest market study by International Data Corporation (IDC).

"Public cloud adoption is accelerating in large part as enterprises recognize that the cloud has become the launchpad for virtually every new IT innovation in the last 24 months -- including AI, blockchain, quantum computing and more," said Frank Gens, senior vice president and chief analyst at IDC.

Public Cloud Market Development

While stronger than expected growth was seen across all regions, Asia-Pacific saw the highest regional growth at 38.9 percent and this market now represents 11.5 percent of all public cloud services revenues. Strong public cloud spending in China, which saw 55.6 percent year-over-year growth in the first half of 2017, is a key driver.

Among the three primary segments of public cloud services (SaaS, PaaS and IaaS), the SaaS segment, which holds 68.7 percent of overall market share, was the slowest growing segment with a 22.9 percent year-over-year growth rate.

More CIOs and CTOs now think 'cloud first' when it comes to their IT strategy and software footprint, since the benefits of cloud have been demonstrated in most industries. Many companies have picked the low-hanging fruit, in terms of apps that could be easily moved to the cloud, and are now evaluating the potential migration of their next set of larger strategic systems to a SaaS model.

That said, the smallest segment overall was PaaS, with 13.6 percent of the public cloud services market. However, the PaaS market continues to deliver stronger growth than the other two segments at 50.2 percent year-over-year in 1H17.

According to the IDC assessment, the rapid adoption of container technology in the PaaS segment has given developers additional tools to accelerate application development and deployment that is important in the typical enterprise digital transformation journey.

Outlook for Private Cloud Applications

The IaaS segment represented 17.8 percent of the public cloud services market in 1H17, and continues to exhibit strong year-over-year growth at 38.1 percent. Growing interest from enterprises and continued investments by cloud service providers has resulted in enhancements in the IaaS segment across multiple dimensions.

The recent introduction of on-premises offerings into the market also enable easier hybrid IT models, and reduce the barrier to more cloud service adoption for enterprises. Cumulatively, these are paving the way for the next wave of enterprise application deployments on cloud computing IaaS.

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