Amazon Web Services (AWS), Google, Microsoft, Salesforce, and SAP are the top public cloud service providers in Asia Pacific excluding Japan and China (APeJC), according to the latest data from the International Data Corp. (IDC).
These five cloud service companies (listed above in alphabetical order) contributed $41.5 billion in cloud revenue in 2023, representing a year-on-year (YoY) growth of 24.2%, according to IDC’s data. They held a market share of 41.2% in 2023, slightly higher than the 41% in 2022.
The market intelligence firm attributed this faster-than-expected growth to the increasing adoption of generative AI (GenAI) applications and use cases.
“Cloud providers are continuously releasing GenAI-related products that focus on developer-friendly and efficiency improvement, which have already brought significant impact to the PaaS and SaaS markets,” said Liew Siew Choon, senior research manager, IDC Asia Pacific.
Choon noted that the impact on the IaaS market is currently minimal, as the pricing structure and ongoing resource planning for accelerated compute are preventing organizations from running large-scale GenAI workloads on IaaS.
Budget allocation shift
As a result, the PaaS market recorded a YoY growth of 46.5%, the highest in the past four years. The SaaS market, on the other hand, remained steady, accounting for over 60% of the total public cloud services market share.
However, the IaaS market experienced a significant decline, with growth slowing to 12.9% in 2023, down from 21.3% in 2022.
IDC believes that the reduction in cloud spending may be due to a shift in budgets toward automation solutions, as businesses seek to streamline their operations and IT processes.
The total public cloud services market size in APeJC is projected to reach $50.8 billion in 2024, reflecting a 22.4% YoY growth, and is expected to more than double to $103 billion by 2028, with a five-year compound annual growth rate (CAGR) of 19.9%.
IDC predicts that PaaS market growth will continue to outpace the overall public cloud services market, with the PaaS market size expected to surpass that of IaaS by 2025.