Global spending on public cloud services is projected to reach $1.35 trillion in 2027, according to IT market research firm IDC. Although annual cloud spending growth is expected to slow slightly over the 2023-2027 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 19.9%.

IDC forecasts that the U.S. will be the largest geographic public cloud market and will reach $697 billion in 2027. Western Europe is predicted to be in second place with $273 billion, followed by China at $117 billion in 2027.

Eileen Smith, program VP for data & analytics at IDC, said cloud is dominating spending in the tech sector across infrastructure, platforms and applications.  She wrote:

“Cloud now dominates tech spending across infrastructure, platforms, and applications.  Most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications and for developing and deploying customer-facing solutions. Looking forward, the cloud model remains incredibly well positioned to serve customer needs for innovation in application development and deployment, including as data, artificial intelligence/machine learning (AI/ML), and edge needs continue to define the forefront of innovation.”

Of the 28 industries* covered in the IDC Spending Guide, the three largest in 2027 – Banking, Software and Information Services, and Telecommunications – will together represent $326 billion in public cloud services spending.

IDC forecasts that software-as-a-service (SaaS) applications to be the largest cloud computing category, garnering about 40% of all public cloud spending. Next largest is infrastructure as a service (IaaS) with a CAGR of 23.5%, followed by platform as a service (PaaS) with a five-year CAGR of 27.2%. SaaS – system infrastructure software (SIS) is forecast to be the smallest category of cloud spending, cornering about 15% of the market.

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References:

https://www.idc.com/getdoc.jsp?containerId=prUS51179523

https://www.idc.com/getdoc.jsp?containerId=IDC_P33214

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