Worldwide spending on public cloud services and infrastructure is forecast to reach USD 266 billion in 2021, estimates International Data Corporation (IDC) Worldwide Semiannual Public Cloud Services Spending Guide. Although spending growth will slow somewhat over the 2016–2021 forecast period, the market is expected to achieve a five-year compound annual growth rate (CAGR) of 21.0 percent. Public cloud services spending will reach USD 128 billion in 2017, an increase of 25.4 percent over 2016.
The United States will be the largest market for public cloud services accounting for more than 60 percent of worldwide revenues throughout the forecast and total spending of USD 163 billion in 2021. Western Europe and Asia-Pacific (excluding Japan) (APeJ) will be the second and third largest regions with 2021 spending levels of USD 52 billion and USD 25 billion, respectively. APeJ and Latin America will experience the fastest spending growth over the next five years with CAGRs of 26.7 percent and 26.2 percent, respectively. However, six of the eight regions are forecast to experience CAGRs greater than 20 percent over the next five years.
The U.S. industries that will see the fastest growth in public cloud services spending are professional services (21.5 percent CAGR), media (21.0 percent CAGR), retail, and telecom (each with a CAGR of 20.9 percent). The U.S. industries that will spend the most on public cloud services are discrete manufacturing, professional services, and banking. Together, these three industries will account for nearly one-third of all public cloud services spending in the United States in 2021. In APeJ, banking, professional services, and telecom will deliver more than a third of the region's public cloud services spending in 2021 while the industries with the fastest spending growth will be professional services, personal and consumer services, and process manufacturing.
Software as a Service (SaaS) will remain the dominant cloud computing type, capturing two-thirds of all public cloud spending in 2017 and nearly 60 percent in 2021. SaaS spending, which comprised applications and system infrastructure software (SIS), will in turn be dominated by application purchases, which will make up more than half of all public cloud spending through 2019. Customer relationship management (CRM) applications and enterprise resource management (ERM) applications will account for more than 60 percent of all cloud applications spending throughout the forecast. Meanwhile, spending on infrastructure as a service (IaaS) and platform as a service (PaaS) will grow at much faster rates than SaaS with five-year CAGRs of 30.0 percent and 29.7 percent, respectively.
In terms of company size, more than half of all public cloud spending will come from very large businesses (those with more than 1000 employees) while medium-sized businesses (100–499 employees) will deliver about 20 percent of spending throughout the forecast. Large businesses (500–999 employees) will see the fastest growth with a five-year CAGR of 22.8 percent. While purchase priorities vary somewhat depending on company size, the leading product categories include CRM and ERM applications in addition to server and storage hardware.
The Worldwide Semiannual Public Cloud Services Spending Guide quantifies public cloud computing purchases by cloud type for 20 industries and five company sizes across eight regions and 47 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.