Home Tech Updates Public cloud services revenue will reach $400 billion in 2021

Public cloud services revenue will reach $400 billion in 2021

by Helen J. Wolf
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The global public cloud services market, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service – System Infrastructure Software (SaaS – SIS), and Software as a Service – Applications grew by 29.0 % year over year in 2021, with total revenue of $408.6 billion, according to International Data Corporation’s Worldwide Semiannual Public Cloud Services Tracker.

Spending continued to consolidate in 2021, with the combined revenue of the top five public cloud service providers (Microsoft, Amazon Web Services, Salesforce Inc., Google, and SAP) capturing nearly 40% of the global total and growing 36.6% year over year. Grew.

Public cloud services revenue will reach $400 billion in 2021

With offerings across all four deployment categories, Microsoft took the top spot in the overall public cloud services market with a 14.4% share in 2021, closely followed by Amazon Web Services with a 13.7% share.

“Organizations will continue their strong adoption of shared public cloud services in 2021 to align IT better investments with business outcomes and ensure rapid access to the innovations needed to be a digital-first business,” said Rick Villars, group vice president of Worldwide Research at IDC.

“Over the next few years, leading cloud providers will play a critical role in helping enterprises navigate the current storms of disruption (inflation, supply chain, and geopolitical tensions), but IT teams will also focus more on bringing greater financial responsibility for the variable spending models of public cloud services.”

While the overall public cloud services market grew 29.0% in 2021, revenue for fundamental cloud services* that support digital-first strategies saw revenue growth of 38.5%. This highlights the increasing reliance of enterprises on a cloud innovation platform built around widespread computing services, data/AI services, and app framework services to drive innovation. IDC expects spending on basic cloud services (particularly IaaS and PaaS elements) to grow faster than the general cloud market as enterprises use the cloud to overcome current disruptions and accelerate their shift to digital business.

“The past few years have shown that in challenging times, companies are increasingly relying on cloud services to modernize their operations and deliver greater value to customers,” said Dave McCarthy, research vice president of Cloud and Edge Infrastructure Services.

“This trend is expected to continue as public cloud providers provide more ways to extend cloud services to on-premises data centers and edge locations. These expanded deployment options reduce many barriers to migration and will facilitate the next wave of cloud adoption.”

“In the digital-first world, enterprises looking to compete for the long term seriously are using the lens of business outcomes to evaluate strategic technology decisions, fueling the fast-growing ecosystem in the public cloud market,” said Lara Greden, researcher director, Platform as a Service, IDC.

“Cloud service providers demonstrated a relentless drive to improve developer productivity and overall application delivery speed, including an emphasis on containers-first and serverless-first approaches.”

Eric Newmark, group vice president and general manager of IDC’s SaaS, Enterprise Software and Worldwide Services division, added: “SaaS applications remain the largest and most mature segment of the public cloud, with 2021 revenue now $ 177 billion.

“The tailwind from the pandemic continued to drive accelerated upgrades and replacements of older systems in 2021, although business goals have not changed,” he says.

“Companies are looking for applications that help increase business intelligence, improve operational efficiency, and drive better decision-making. Ease of use, ease of implementation and integration, streamlined workflows, data, analytic accessibility, and time-to-value are key criteria for purchasing decisions. , although verticalization has also steadily increased as a key priority.”

While both the fundamental cloud services market and the SaaS application market are led by a few companies, there remains a healthy long tail of companies providing cloud services worldwide. In the fundamental cloud services market, these leading companies account for nearly three-quarters of the market’s revenue with targeted use case-specific PaaS or cross-cloud computing, data, or network management services. The long tail is more pronounced in the SaaS applications market, where customers’ growing focus on specific outcomes means more than two-thirds of spend falls outside the top 5.

IDC defines Foundational Cloud Services as the Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service – System Infrastructure Software (SaaS – SIS) market segments where the top eight public cloud service providers (Amazon Web Services, Microsoft, Google, Alibaba Group, IBM, Tencent, Huawei, and Oracle) account for the majority of revenue. These include the following key service portfolios:

Compute Services: Virtualized x86 Compute, Bare Metal Compute, Block Storage, Accelerated Compute, Other Compute, and Software Defined Computer Software. Data services: data management systems, object storage, file storage, and event stream processing software. App Framework Services: Developer-focused software for developing and deploying applications in the cloud, including lifecycle management. These services include integration software, deployment-focused application platforms, and AI Lifecycle software. Usage Multiplier Services: Services that encourage greater/more effective use of high-value services by making it easier to acquire, connect, deploy, track, secure, and update those services. Includes load balancing, DNS, marketplaces, and open-source software solutions bundles.

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