APeJ Public Cloud Services Spending to Worth $15Bn in 2019- IDC

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% compound annual growth rate (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%.

This new spending guide expands on IDC’s previous public cloud services forecasts by offering greater detail on industry and geographic spending levels.

APEJ spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 28.9%% and 21.2%, respectively. Software as a Service (SaaS) will 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,” added Mr. Morris.

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 $744 million, respectively. Telecommunications will be the fastest-growing vertical industry over the 2014-2019 forecast period with a CAGR of 29.2% in APeJ. It is expected to move ahead of discrete manufacturing into the number 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 3 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, organizations across the industries will shift steadily toward cloud-first strategies to enable digital transformation,” adds Ms. Sabharwal.

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.

Unlike any other research in the industry, the comprehensive spending guide was designed to help IT decision makers to clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years.