Cloud Services Spending to Reach $195 Billion in Four Years

International Data Corporation (IDC) projects that global revenue from public cloud services will surpass $195 billion by 2020, more than doubling this year’s forecast of $96.5 billion. The new figures, part of IDC’s Worldwide Semiannual Public Cloud Services Spending Guide, represent a compound annual growth rate of 20.4 percent over 2015-2020. Also, IDC expects that revenue from Infrastructure as a Service and Platform as a Service will increase at a faster rate than revenue from Software as a Service. Media, telecom and retail will experience the fastest revenue growth.

According to the release: “Cloud software — the service enablement of products in all three primary software markets: applications as a service, system infrastructure software (SIS) as a service (which combine to form SaaS), and application development and deployment (AD&D) or platform as a service (PaaS) — was responsible for 83.7 percent of all public cloud revenue in 2015, with the remaining 16.3 percent belonging to infrastructure as a service (IaaS).”


“Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets,” said Benjamin McGrath, senior research analyst, SaaS and Business Models.

“By 2020, about half of all new business software purchases will be of service-enabled software, and cloud software will constitute more than a quarter of all software sold,” he added.

Manufacturing, banking and professional services hold the lead in public cloud services spending in 2016, while media, telecommunications and retail are expected to experience the fastest revenue growth over the five-year forecast.

“All 20 of the industries profiled in the spending guide will experience revenue growth of more than 100 percent over the forecast period,” IDC predicts.