End user spending on public cloud services is expected to reach almost $500 billion worldwide this year and close to $600 billion next year, as hybrid work trends continue to drive organizations to migrate IT tools and resources to the cloud, according to the latest forecast from research firm Gartner.
Among public cloud as-a-service segments, Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2022 at 30.6%, reaching $119.7 billion. IaaS also is forecast to experience faster growth than other segments in 2023, when Garner predicts IaaS spending will hit $156.2 billion.
After IaaS, desktop-as-a-service (DaaS) has the next-highest growth rate at 26.6%, for an expected segment spending value of $2.6 billion this year. While DaaS is currently the smallest individual segment tracked in terms of overall money spent, its sharp growth rate in particular is a direct reflection of how enterprise organizations are moving away from reliance on traditional physical in-office tools like desktop computers and peripherals, and toward cloud-based client computing solutions, Gartner stated. Hybrid work scenarios are changing the game even for major telecom service providers and their own end users, as Fierce Telecom reported this week.
Meanwhile, the Platform-as-a-service segment is forecast to grow 26.1% this year to $109.6 billion. “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,” said Sid Nag, research vice president at Gartner, in a statement. “As a result, they are generally more expensive which is fueling spending growth.”
As for other segments, Business Process-as-a-service will reach $55.6 billion in end user spending this year, while Cloud Management and Security spending surpasses $35 billion.
Software-as-a-service will continue to be the largest individual segment, with spending hitting $176.6 billion this year and predicted to reach $208 billion in 2023. Enterprises are taking multiple routes to market with SaaS, for example via cloud marketplaces, which will continue to drive SaaS growth, Gartner said.
The individual segment growth rates add up to an overall 20.4% increase in end user spending for 2022, pushing total market spending to $494.7 billion, up from $410.9 billion in 2021.
The data comes from the Gartner report, Forecast: Public Cloud Services, Worldwide, 2020-2026, 1Q22 Update.
“Cloud is the powerhouse that drives today’s digital organizations,” said Nag. “CIOs are beyond the era of irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey.”
He added, “IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys. The organizations combining cloud with other adjacent, emerging technologies will fare even better.”