Skip to main content

Global Public Cloud Spending to Reach $1.35T

Most digital transformation is enabled by cloud solutions. Worldwide spending on public cloud services is forecast to reach $1.35 trillion in 2027, according to the latest worldwide market study by International Data Corporation (IDC).

Although annual spending growth is expected to slow slightly over the 2023-2027 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 19.9 percent.

"Cloud now dominates tech spending across infrastructure, platforms, and applications," said Eileen Smith, vice president at IDC.

Public Cloud Services Market Development

IDC believes that most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications, and for developing and deploying customer-facing solutions.

Looking forward, the cloud computing model remains well positioned to serve customer needs for innovation in application development and deployment -- including as data, artificial intelligence or machine learning, and edge needs continue to define the forefront of innovation.

Of the 28 industries reviewed, the three largest in 2027 – Banking, Software and Information Services, and Telecommunications – will together represent $326 billion in public cloud services spending.

Retail and Professional and Personal Services will be the most prominent industries in terms of spending, giving the top 5 sectors a combined share of nearly 36 percent.

The industries that will see the fastest spending growth through 2027 are Software and Information Services (24 percent CAGR), Capital Markets (21.9 percent CAGR), and Telecommunications (21.8 percent CAGR).

In fact, according to the IDC assessment, every industry except Consumer will deliver double-digit CAGRs over the 2023-2027 forecast period.

Software as a Service (SaaS) applications will be the largest category of cloud computing, capturing roughly 40 percent of all public cloud spending.

SaaS applications will also see the slowest spending growth over the forecast period with a five-year CAGR of 15.8 percent. The leading SaaS applications will be enterprise resource management (ERM) and customer relationship management (CRM), followed by content workflow and management applications and collaborative applications.

Infrastructure as a Service (IaaS) will be the second largest category of public cloud spending, followed by Platform as a Service (PaaS).

PaaS spending will be the fastest-growing category with a five-year CAGR of 27.2 percent, led by purchases of data management software, application platforms, and analytics and business intelligence software.

IaaS spending, comprised of compute, storage, and networking devices, will be the second fastest growing category with a CAGR of 23.5 percent.

SaaS System Infrastructure Software (SIS) will be the smallest category of cloud spending, representing roughly 15 percent of the overall market.

Security software will be the largest area of investment in this category, rivaling ERM spending in the SaaS applications category. Physical and virtual computing software will see the fastest spending growth among the SIS products.

Outlook for Public Cloud Regional Growth

The United States will be the largest geographic public cloud market with spending forecast to reach $697 billion in 2027.

The Western Europe region will be the second largest market in 2027 with investments totaling $273 billion, followed by China at $117 billion.

The Latin America region will see the fastest spending growth with a five-year CAGR of 29.1 percent, followed by China with a CAGR of 26.9 percent.

That said, I believe public cloud services offer a number of compelling benefits for forward-thinking organizations that empower their leaders to succeed in the quest for successful digital transformation initiatives. These projects will continue to drive market development across the globe.

Popular posts from this blog

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

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