Public Cloud Spending to Double to $141B in 2019, According to IDC

Worldwide spending on public cloud services could explode past $141 billion by 2019, according to new research from International Data Corporation (IDC).

According to predictions in IDC’s new Worldwide Semiannual Public Cloud Services Spending Guide, worldwide spending on public cloud services will grow at a 19.4% compound annual growth rate (CAGR) over the next three years– that’s almost six times the rate of overall IT spending growth—an explosive growth spurt that would double worldwide public cloud spending from nearly $70 billion in 2015 to more than $141 billion in 2019.

Unlike any other research in the industry, the comprehensive spending guide was designed to help IT decision makers to clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years.

The report quantifies public cloud computing purchases by cloud type for 20 industries across eight regions and 54 countries and was designed to “help IT decision makers clearly understand the industry-specific scope and direction” of cloud spending for the foreseeable future.

 IDC’s new spending guide expands on IDC’s previous public cloud services forecasts and is just the latest in a series of analyst predictions for massive cloud spending growth in the next five years.

 Spending as a Service

Software as a Service (SaaS) will remain the most prominent cloud computing type, and will hold more than two-thirds of all public cloud spending through most of the forecast period, according to IDC. However, worldwide spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will grow at a faster rate than SaaS with five-year CAGRs of 27.0% and 30.6%, respectively.

“Over the past several years, the software industry has been shifting to a cloud-first (SaaS) development and deployment model. By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base,” said Frank Gens, Senior Vice President & Chief Analyst at IDC. “This means that many enterprise software customers, as they reach their next major software upgrade decisions, will be offered SaaS as the preferred option. Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud.”

Who’s Buying

Large companies, many of whom have shifted towards a “cloud-first” IT strategy will be the primary driver of public cloud growth, with spending of more than $80 billion in 2019, according to IDC. However, the research company predicts that small and medium businesses (SMBs) will also be a significant contributor to overall cloud spending, with more than 40% of the worldwide total throughout the forecast period coming from companies with fewer than 500 employees.

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