The public cloud services market experienced worldwide growth of 27.4 per cent year-over-year in 2018, significantly outpacing the IT industry in the process.
According to IDC findings - spanning the second half of 2018 - revenues nudged towards $183 billion at a global level, more than 4.5 times that of the entire technology market.
The analyst firm reported a “modest drop” from 2017, viewed as “not unexpected” given the growing base of comparison in the public cloud services market, which has more than doubled over the preceding three years.
“Our latest public cloud data continues to show robust growth - headed toward almost $500 billion by 2023 - and consolidating power positions across the board,” said Frank Gens, senior vice president and chief analyst, IDC.
The top five public cloud service providers accounted for 46.3 per cent of all spending growth in 2018 and 35 per cent of all spending during the year, up three points from 2017.
Gens said this "continues a consolidation trend" in the overall public cloud services market among the leaders, "most pronounced" in the combined infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) segments, in which the top five vendors accounted for 63 per cent share of spending.
"The most intense and strategic consolidation - in the combined IaaS and PaaS segments - is being driven by developers' and enterprises' bets on which vendors will sustainably deliver tech innovation for the next decade and beyond,” Gens added.
Meanwhile, software-as-a-service (SaaS) continued to be the most highly deployed cloud segment, representing a "commanding" 62.4 per cent of the total cloud market revenues, including system infrastructure software (SIS).
“Adoption of cloud enterprise business applications like ERP, SCM, and HCM also accelerated across all segments with most buyers taking a SaaS-first or SaaS-also posture for new applications,” said Frank Della Rosa, research director of SaaS, IDC.
Specific to PaaS, Larry Carvalho - research director of PaaS, IDC - said the continued demand for applications and the shortage of professional developers fuelled market growth.
“Cloud native infrastructure grew demand for platform tools to accelerate application development and deployment powered by abstracted container workloads,” Carvalho said.
Although Asia Pacific as a region held around 11 per cent of total share, revenue grew faster than the rest of the world, according to IDC.
“The public cloud IaaS market reversed its trend of slowing growth with a robust jump in its year-over-year growth rate,” added Deepak Mohan, research director of cloud infrastructure services, IDC.
For Mohan, this shift is notable - given the $24 billion base of this market in 2017 - and was "driven heavily" by growth among the global market leaders and in the Asia Pacific, particularly China.
“Revenue growth for Amazon Web Services and in the APeJ region jointly accounted for 80 per cent of all the spending growth in 2018,” Mohan said.