Skip to main content

Digital Transformation is Advancing Hybrid Multi-Cloud

If you're a CTO or CIO that has escalated your organization's move to the cloud, then clearly you're not alone. Worldwide spending on public cloud services and infrastructure is forecast to reach $160 billion in 2018 -- that's an increase of 23.2 percent over 2017, according to the latest market study by International Data Corporation (IDC).

Although annual spending growth is expected to slow somewhat over the 2016-2021 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 21.9 percent with public cloud services spending totaling $277 billion in 2021.

Public Cloud Services Market Development

The industries that are forecast to spend the most on public cloud services in 2018 are discrete manufacturing ($19.7 billion), professional services ($18.1 billion), and banking ($16.7 billion). The process manufacturing and retail industries are also expected to spend more than $10 billion each on public cloud services in 2018.

These five industries will remain at the top in 2021 due to their continued investment in public cloud solutions. The industries that will see the fastest spending growth over the five-year forecast period are professional services (24.4 percent CAGR), telecommunications (23.3 percent CAGR), and banking (23 percent CAGR).

Software as a Service (SaaS) will be the largest cloud computing category, capturing nearly two thirds of all public cloud spending in 2018. SaaS spending, which is comprised of applications and system infrastructure software (SIS), will be dominated by applications purchases, which will make up more than half of all public cloud services spending through 2019.

Enterprise resource management (ERM) applications and customer relationship management (CRM) applications will see the most spending in 2018, followed by collaborative applications and content applications.

Infrastructure as a Service (IaaS) will be the second largest category of public cloud spending in 2018, followed by Platform as a Service (PaaS). IaaS spending will be fairly balanced throughout the forecast with server spending trending slightly ahead of storage spending.

PaaS spending will be led by data management software, which will see the fastest spending growth (38.1 percent CAGR) over the forecast period. Application platforms, integration and orchestration middleware, and data access, analysis and delivery applications will also see healthy spending levels in 2018 and beyond.

The United States will be the largest country market for public cloud services in 2018 with its $97 billion accounting for more than 60 percent of worldwide spending. The United Kingdom and Germany will lead public cloud spending in Western Europe at $7.9 billion and $7.4 billion respectively, while Japan and China will round out the top 5 countries in 2018 with spending of $5.8 billion and $5.4 billion, respectively.

China will experience the fastest growth in public cloud services spending over the five-year forecast period (43.2 percent CAGR), enabling it to leap ahead of the UK, Germany, and Japan into the number 2 position in 2021. Argentina (39.4 percent CAGR), India (38.9 percent CAGR), and Brazil (37.1 percent CAGR) will also experience particularly strong spending growth.

Outlook for Cloud Adoption by Industry

The U.S. industries that will spend the most on public cloud services in 2018 are discrete manufacturing, professional services, and banking. Together, these three industries will account for roughly one third of all U.S. public cloud services spending this year.

In the UK, the top three industries (banking, retail, and discrete manufacturing) will provide more than 40 percent of all public cloud spending in 2018, while discrete manufacturing, professional services, and process manufacturing will account for more than 40 percent of public cloud spending in Germany.

In Japan, the professional services, discrete manufacturing, and process manufacturing industries will deliver more than 43 percent of all public cloud services. The professional services, discrete manufacturing, and banking industries will represent more than 40 percent of China's public cloud services spending in 2018.

"Digital transformation is driving multi-cloud and hybrid environments for enterprises to create a more agile and cost-effective IT environment in the Asia-Pacific region," said Ashutosh Bisht, research manager at IDC. "Even heavily regulated industries are using SaaS for non-core functionality, platform as a service (PaaS) for app development and testing, and IaaS for workload trial runs and testing for their new service offerings."

Popular posts from this blog

Demand for Quantum Computing as a Service

The enterprise demand for quantum computing is still in its early stages, growing slowly. As the technology becomes more usable, we may see demand evolve beyond scientific applications. The global quantum computing market is forecast to grow from $1.1 billion in 2022 to $7.6 billion in 2027, according to the latest worldwide market study by International Data Corporation (IDC). That's a five-year compound annual growth rate (CAGR) of 48.1 percent. The forecast includes base Quantum Computing as a Service, as well as enabling and adjacent Quantum Computing as a Service. However, this updated forecast is considerably lower than IDC's previous quantum computing forecast, which was published in 2021, due to lower demand globally. Quantum Computing Market Development In the interim, customer spend for quantum computing has been negatively impacted by several factors, including: slower than expected advances in quantum hardware development, which have delayed potential return on inve

AI Semiconductor Revenue will Reach $119.4B

The Chief Information Officer (CIO) and/or the Chief Technology Officer (CTO) will guide Generative AI initiatives within the large enterprise C-Suite. They may already have the technical expertise and experience to understand the capabilities and limitations of Gen AI. They also have the authority and budget to make the necessary investments in infrastructure and talent to support Gen AI initiatives. Enterprise AI infrastructure is proven to be expensive to build, operate and maintain. That's why public cloud service provider solutions are often used for new AI use cases. AI Semiconductor Market Development Semiconductors designed to execute Artificial Intelligence (AI) workloads will represent a $53.4 billion revenue opportunity for the global semiconductor industry in 2023, an increase of 20.9 percent from 2022, according to the latest worldwide market study by Gartner. "The developments in generative AI and the increasing use of a wide range AI-based applications in data c

Industrial Cloud Computing Apps Gain Momentum

In the manufacturing industry, cloud computing can help leaders improve their production efficiency by providing them with real-time data about their operations. This has gained the attention of the C-suite. Total forecast Industrial Cloud platform revenue in manufacturing will surpass $300 billion by 2033 with a CAGR of 22.57 percent, driven by solution providers enhancing platform interoperability while expanding partner ecosystems for application development. ABI Research found the cloud computing manufacturing market will grow over the next decade due to the adoption of new architectural frameworks that enhance data extraction and interoperability for manufacturers looking to maximize utility from their data. Industrial Cloud Computing Market Development "Historically, manufacturers have built out their infrastructure to include expensive data housing in the form of on-premises servers. The large initial upfront cost of purchasing, setting up, and maintaining these servers is