Note 1.  IDC’s Worldwide Semiannual Public Cloud Services Tracker® monitors the evolving and shifting competitive dynamics of the public cloud services market. It tracks and measures the individual public cloud services providers’ historical business performance and forecasts five years into the future — across 53 geographies and up to 80 discrete market segments. This extensive coverage of vendor share information enables both global and local players to benchmark themselves in terms of business growth and market penetration. Software vendors, systems integrators, value-added resellers, distributors, investors, and other users will be able to keep track of the market performance of main competitors such as Salesforce, Oracle, Google, Microsoft, and Amazon Web Services as well as identify the newcomers to the market and measure the impact and potential of those new players on the competitive landscape.

…………………………………………………………………………………………………………………………………..

Spending continued to consolidate in 2020 with the combined revenue of the top five public cloud service providers (Amazon Web Services (AWS), Microsoft (Azure), Salesforce.com, Google, and Oracle) increased their spending by 32% and captured 38% of the worldwide total market.

Thanks to an expanding portfolio of SaaS and SISaaS offerings, Microsoft now shares the top position with Amazon Web Services in the whole public cloud services market with both companies holding 12.8% revenue share for the year.

“Access to shared infrastructure, data, and application resources in public clouds played a critical role in helping organizations and individuals navigate the disruptions of the past year,” said Rick Villars, group vice president, Worldwide Research at IDC. “In the coming years, enterprises’ ability to govern a growing portfolio of cloud services will be the foundation for introducing greater automation into business and IT processes while also becoming more digitally resilient.”

While the overall public cloud services market grew 24.1% in 2020, consistent with the past four years, the IaaS and PaaS segments have consistently grown at much faster rates. This highlights the increasing reliance of enterprises on a cloud foundation built on cloud infrastructure, software defined data, compute and governance solutions as a Service, and cloud-native platforms for application deployment for enterprise IT internal applications. IDC expects spending on foundational cloud services (especially IaaS and PaaS) to continue growing at a higher rate than the overall cloud market as resilience, flexibility, and agility guide IT platform decisions.

“Cloud service providers are rapidly expanding their portfolio of infrastructure and platform services to address confidential computing, performance intensive computing, and hybrid deployment scenarios,” said Dave McCarthy, vice president, Cloud and Edge Infrastructure Services. “Extending these foundational cloud services to customer premises and communications networks enables a broader set of use cases than previously possible.”

“The high pace of growth in PaaS, IaaS, and SISaaS, which combined account for about half of the public cloud services market, reflects the demand for solutions that accelerate and automate the development and delivery of modern applications” said Lara Greden, research director, Platform as a Service. “As organizations adopt DevOps approaches and align according to value streams, we are seeing PaaS, IaaS, and SISaaS solutions become increasingly adopted and, at the same time, grow in the range of services and thus value they provide. Innovations in edge and IoT use cases are also contributing to the faster rates of growth in these markets.”

“SaaS applications are the largest and most mature segment of public cloud with 2020 revenues of $148 billion. Organizations across industries hastened the replacement of legacy business applications with a new breed of SaaS applications that is data-driven, intuitive, composable, and ideally suited for more distributed cloud architectures. Organizations looking for industry-specific applications can choose from a growing assortment of vertical applications. The SaaS apps market is dominated by a longtail of providers that account for 65% of the total market,” said Frank Della Rosa, research director, SaaS and Cloud Software.

Worldwide Public Cloud Services Revenue and Year-over-Year Growth, Calendar Year 2020 (revenues in US$ billions)

Segment	2020 Revenue	Market Share	2019 Revenue	Market Share	Year-over-Year Growth
IaaS	$67.2	21.5%	$50.2	19.9%	33.9%
SaaS – System Infrastructure Software	$49.2	15.7%	$40.2	16.0%	22.4%
PaaS	$47.6	15.2%	$36.1	14.4%	31.8%
SaaS – Applications	$148.4	47.5%	$125.2	49.7%	18.6%
Total	$312.4	100%	$251.7	100%	24.1%
Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H20

Looking at the segment results, a combined view of IaaS, SISaaS, and PaaS spending is relevant because it represents the foundational set of services that end customers and SaaS companies consume when running, modernizing, building, and governing applications on shared public clouds. In the combined IaaS, SISaaS and PaaS market, the top 5 companies (Amazon Web Services, Microsoft, Google, Alibaba, and IBM) captured over 51% of global revenues. But there continues to be a healthy long tail, representing nearly half the market total. These are companies with targeted use case-specific PaaS services or cross-cloud compute, data, or network governance services. The long tail is even more pronounced in SaaS, where customers growing focus on specific outcomes ensures that over two thirds of the spending is captured outside the top five.