In the latest data from market intelligence firm International Data Corp. (IDC) sees that the total worldwide spending on cloud services (whole cloud) will surpass $1.3 trillion by 2025 while sustaining a compound annual growth rate (CAGR) of 16.9%.
Whole cloud consists of cloud services, the hardware and software components underpinning the cloud supply chain, and the professional/managed services opportunities around cloud services.
“In today’s digital-first world, business outcomes and innovation are increasingly tied to the ability to develop and use innovative technologies and services anywhere, as quickly as possible. Cloud is the foundation for meeting this need,” said Rick Villars, group vice president, Worldwide Research at IDC. “Entire industries want to intelligently leverage data to their advantage and can do so because they have faster access to digital technologies built on a cloud foundation.”
The forecast explored public and private cloud services.
Public cloud, simply put, is shared and is offered in various forms including Infrastructure-as-a-Service (IaaS), System Infrastructure Software-as-a-Service (SISaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). IDC said this segment will total $385 billion in 2021 and will see a compound annual growth rate (CAGR) of over 21.0% through 2025, reaching $809 billion.
Private cloud, on the other hand, which includes hosted private cloud services and the fast-emerging Dedicated Cloud Infrastructure-as-a-Service (DCIaaS) segment, will grow at a faster CAGR of 31.0%, but from a much smaller revenue base of $5 billion in 2021.
According to IDC, the as-a-Service segments of cloud spending, combining Shared Cloud as-a-Service and Dedicated Cloud as-a-Service, will account for the majority of all cloud spending throughout the forecast, growing from 55.7% in 2021 to 64.1% in 2025. These segments will also see the fastest growth in spending, with a five-year CAGR of 21.3%.
IDC said that the fundamentals driving the cloud market will continue to shift with the transition to a digital-first economy. For cloud service providers (both public and private), the focus will be on defining the types and scale of resources delivered, governing the movement, storage, and analysis of data, and establishing robust developer, security, and subject matter ecosystems. For cloud infrastructure providers, the development and deployment of specialized capabilities across diverse environments will become more important than extending the breadth of generalized solutions. And for IT organizations, the governance of diverse cloud resources and data sets will pose critical operational challenges.
“With enterprises focusing more on ‘outcomes’ in their cloud selection processes, the long-term focus for all cloud providers will be on strengthening their relationships with business, not IT, from device, to edge, to network, to core,” Villars said.