The public cloud services market achieved significant growth in 2023, with worldwide revenue totaling $669.2 billion, posting a 19.9% increase from the previous year, according to the International Data Corp. (IDC) Worldwide Semiannual Public Cloud Services Tracker.
The IDC data found that Software as a Service – Applications (SaaS – Applications), made up nearly 45% of the market, making it the largest contributor to the revenue. was followed by Infrastructure as a Service (IaaS) with 19.9% of the total revenue. Other contributors to the revenue included Platform as a Service (PaaS) with 18.4% and Software as a Service – System Infrastructure Software (SaaS – SIS), accounting for 17%.
However, data from IDC showed that PaaS and SaaS – SIS recorded the fastest year-over-year revenue growth.
“End-user investment in AI has propelled PaaS revenue growth beyond the overall cloud market,” said Adam Reeves, research director for PaaS for Developers of Modern and Edge Applications at IDC. “Providers are increasingly offering AI-powered PaaS solutions that prioritize performance, security, and developer accessibility.”
The top five public cloud service providers, Microsoft, Amazon Web Services (AWS), Salesforce, Google, and Oracle, continued to dominate the market, collectively holding 40.5% of the global revenue. Microsoft led with a 16.8% market share, followed by AWS at 12.4%.
IDC projects that public cloud services revenue will exceed $800 billion in 2024, with a growth rate of 20.5%. The forecast indicates that the market will sustain robust expansion, with a five-year compound annual growth rate (CAGR) of 19.5%, reaching $1.6 trillion by 2028.
“Public cloud IaaS is becoming a crucial component for AI-ready infrastructure as cloud service providers invest heavily in the necessary high-performance resources,” said Dave McCarthy, research VP for Cloud and Edge Infrastructure Services at IDC.