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February 21, 2017

Public cloud spending in 2017 to surpass $120bn

Software as a Service spending continues to dominate but Infrastructure as a Service and Platform as a Service adoption is faster.

By James Nunns

Public cloud services and infrastructure spending is still growing at a rapid pace and is expected to reach $122.5bn this year.

That’s according to IDC’s Worldwide semi-annual Public Cloud Services Spending Guide which shows that the market will grow at 24.4% from last year.

That pace is likely to continue at 21.5% over the 2015-2020 forecast period and the market will see cloud spending reach $203.4bn worldwide by 2020. To put this into some context, this growth is seven times the rate of overall IT spending growth.

The dominant part of this market will remain Software as a Service, bringing in almost two thirds of all public cloud spending this year and roughly 60% in 2020.

IDC said: “SaaS spending, which is comprised of applications and system infrastructure software (SIS), will in turn be dominated by applications purchases, which will make up more than half of all public cloud spending throughout the forecast period.”

However, while SaaS spending may continue to dominate, spending on Infrastructure as a Service and Platform as a Service will grow at 30.1% and 32.2% respectively.

Public CloudEileen Smith, program director, Customer Insights and Analysis, said: “In 2017, discrete manufacturing, professional services, and banking will lead the pack in global spending on public cloud services as they look for greater scalability, higher performance, and faster access to new technologies.

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“Combined, these three industries will account for one third of worldwide public cloud services spending, or $41.2 billion.”

Professional services spending is forecast to grow (all in CAGR) at 23.9%, while retail and media will see the next highest levels of growth at 22.8% and 22.5% respectively.

Although these industries have been highlighted, it should be noted that 18 of the 20 industries included in the Spending Guide will see five-year growth of other 20%.

Read more: Cloud growth clears away the January gloom for tech giants reveling in revenue growth

Perhaps unsurprisingly, around half of all public cloud spending will come from very large businesses, those with more than 1,000 employees, and the United States will generate more than 60% of total worldwide revenues throughout the forecast. Western Europe will be the second largest and Asia/Pacific the third.

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