IDC says global spending on public cloud services to hit $122.5bn in 2017

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Global spending on public cloud services and infrastructure will hit $122.5 billion by the end of this year at an increase of almost 25% on 2016, according to the latest note from IDC.

The analyst house argues that discrete manufacturing, professional services, and banking are the primary public cloud service industries based on market share today, while professional services (23.9% compound annual growth rate), retail (22.8%) and media (22.5%) are expected to be the fastest growers. Almost half of all public cloud spending will come from businesses with more than 1,000 employees.

The United States will remain the largest market for public cloud services generating more than 60% of revenue through the forecast period, IDC argues. Yet seven out of eight regions are expected to reach CAGRs of more than 20% over the next five years – with the US lagging behind at a mere 19.9% CAGR.

“European companies have been slower in the adoption of cloud when compared to their US counterparts, but now the market is maturing and it is the right time for cloud providers to target and capture the untapped segments,” said Serena Da Rold, IDC senior research manager for customer insights and analysis.

This missive makes sense when examining the various moves providers have made in the continent over recent months. Last month reports said that Facebook was expanding its data centre empire with a new site in Denmark, while Rackspace moved operations to Germany in November last year and IBM became the latest vendor to build a UK site at the same time.

Software as a service will remain dominant albeit slowing down over time – two thirds of all public cloud spending in 2017, moving to 60% by 2020 – yet the figures also need to be tempered with some lateral thinking, IDC argues.

“As cloud adoption expands over the next four years, what clouds are and what they can do will evolve dramatically – in several important ways,” said Frank Gens, senior vice president and chief analyst at IDC. “The cloud will become more distributed – through Internet of Things edge services and multicloud services – more trusted, more intelligent, more industry and workload specialised, and more channel mediated.

“As the cloud evolves these important new capabilities – what IDC calls ‘Cloud 2.0’ – the use cases for the cloud will dramatically expand,” Gens added.

According to a note from Synergy Research published at the beginning of this month, quarterly public cloud infrastructure service revenues – including public infrastructure as a service and platform as a service – have hit more than $7 billion, continuing to grow at almost 50% per year.

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