Asia’s public cloud spend to double, outpacing overall IT spend by 6x

  • By 2018, most software vendors will have fully shifted to SaaS/ PaaS code base
  • Top 3 industries: Discrete manufacturing; telecommunications and banking
Asia’s public cloud spend to double, outpacing overall IT spend by 6x

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 to US$15 billion in 2019.
This is faster than the estimated 19.4% CAGR for the worldwide cloud services spending for the same forecast period, IDC said in a statement, citing its new Worldwide Semiannual Public Cloud Services Spending Guide.
The guide quantifies public cloud computing purchases by cloud type for 20 industries across eight regions and 54 countries. It expands on IDC's previous public cloud services forecasts by offering greater detail on industry and geographic spending levels, the research and analyst firm said in a statement.
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, IDC said.
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,” said Chris Morris, vice president for Cloud Services Research at IDC Asia/Pacific.
“By 2018, most software vendors will have fully shifted to a SaaS/ PaaS code base.
“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,” he added.
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 US$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 No 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 three spending industries will include professional services, IDC said.
“Cloud services will remain the essential foundation of the IT industry's Third Platform of innovation and growth,” said Rubal Sabharwal, research manager for Customer Insights and Analysis in IDC APeJ.
“As the cloud market enters an ‘innovation stage,’ there will be an explosion of new solutions and value creation on top of the cloud.
“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, organisations across the industries will shift steadily toward cloud-first strategies to enable digital transformation,” she added.
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