Public Cloud Spending To Hit Almost US$500B This Year – Report

adminApril 21, 2022April 21, 2022no commentNo tags

By Peter Cohen

Worldwide end-user spending on public cloud services will grow 20.4 per cent to US$494.7 billion, up from US$410.9 billion in 2021, according to the latest numbers from Gartner research. Gartner expects end-user spending to approach US$600 billion in 2023. The report highlighted the growth of the Infrastructure as a Service (IaaS) market and identified hyperscale edge computing and Secure Access Service Edge (SASE) as disruptive market factors.

The global drive towards digital transformation continues to fuel growth of core public cloud infrastructure services, the IaaS segment identified by Gartner. Businesses, municipalities, and organizations across the globe continue to move away from on-premise data centers, the demand for cloud infrastructure expands. IaaS annual public spend growth is projected to reach 30.6 per cent, said Gartner.

Demand for cloud-native capabilities by Platform as a Service (PaaS) customers is fueling segment growth, indicated Gartner research vice president Sid Nag. PaaS solutions provide complete development and deployment environments for cloud apps. Global PaaS spending in 2021 approached US$87 billion, US$41 billion more than Gartner predicted last year. Gartner predicts PaaS growth at 26.1 per cent for 2022.

“Cloud native capabilities such as containerization, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditized compute such as IaaS or network-as-a-service. As a result, they are generally more expensive which is fueling spending growth,” Nag said.

The Desktop as a Service segment – comprising cloud-based desktop virtualization services from businesses like Citrix and VMware – is expected to grow 26.6 per cent this year. The demand for hybrid work services is prompting enterprises to move away from traditional client computing solutions, according to Gartner, and towards the burgeoning DaaS segment, which Gartner sees reaching US$2.6 billion in 2022.

SaaS is still king

Software as a Service (SaaS) remains the single biggest public cloud services market segment identified in the Gartner report. The report forecasts US$176.6 billion in SaaS public cloud spending this year, up 16 per cent year over year.

“Gartner expects steady velocity within this segment as enterprises take multiple routes to market with SaaS, for example via cloud marketplaces, and continue to break up larger, monolithic applications into composable parts for more efficient DevOps processes,” it said.

As public cloud services continue to evolve and service providers innovate, emerging cloud services are becoming less generalized and more outcome-driven to achieve specific enterprise objectives, according to Nag.

“Driven by maturation of core cloud services, the focus of differentiation is gradually shifting to capabilities that can disrupt digital businesses and operations in enterprises directly. Public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty,” said Nag.