Spending on public cloud services and infrastructure across Asia Pacific is forecast to reach US$26 billion in 2019, representing an increase of 47.1 per cent over 2018.
According to new IDC findings, the market is expected to increase almost three times with a five-year compound annual growth rate (CAGR) of 33.9 per cent, reaching $76.1 billion by 2023.
“Improving the business agility and speed is the main focus area for the adoption of cloud technology in the region, access to new refined functionality and giving the business units more direct control over the sourcing of their own IT solutions are the other focus areas,” said Ashutosh Bisht, senior research manager, IDC.
From a technology standpoint, infrastructure-as-a-service (IaaS) represents the largest category of cloud computing delivering 50.2 per cent of overall public cloud spend in 2019 and more than half until 2023.
Meanwhile, Bisht said software-as-a-service (SaaS) has positioned itself second largest in terms of spending on cloud with a share of 39.03 per cent followed by platform-as-a-service (PaaS) with 10.7 per cent share in 2019.
“Primarily, IaaS spending will be balanced throughout the forecast with server spending trending slightly ahead of storage spending,” Bisht added.
SaaS spending, including applications and system infrastructure software (SIS), will be dominated by applications purchases, Bisht said, while PaaS spending will be led by data management software.
“Security concerns and IT governance are the major inhibitors towards the cloud adoption but sentiments about security on public cloud have changed over recent years, with improving IT securities now considered as one of the top drivers for public cloud adoption,” Bisht explained.
Specific to sectors, professional services, banking and discrete manufacturing represent the top three industries that account for more than one third of all public cloud services spending throughout the forecast.
According to IDC, IaaS will be the "foremost category" of investment for all industries, seeing its share of spending increase for industries that are building data and compute intensive services.
"For example, IaaS spending is expected to capture more than 13.6 per cent of public cloud services spending by the professional services industry in 2023," an IDC report stated.
However, construction and professional services will see the fastest growth in public cloud spending with a five-year CAGR of 41.6 per cent and 40.9 per cent respectively.
“The smart city initiatives across major cities in the region have opened the door for governments to revamp their legacy systems and transform the traditional IT with public cloud services,” said Siew Choon Liew, research manager, IDC.
“In addition, authorities are easing regulations for regulated industries, such as banking, to leverage on public cloud services for better services offerings.”
Delving deeper, "very large" businesses (more than 1000 employees) will account for 37.7 per cent of all public cloud spending, while medium-size businesses (100-499 employees) will deliver around 29.8 per cent of the total in 2019 followed by large businesses (500-999 employees) with 20.5 per cent share in Asia Pacific.
Small businesses (10-99 employees) have a few percentage points while the spending share from small offices (1-9 employees) will be in the low single digits throughout the forecast.