The latest data from market intelligence firm International Data Corp. (IDC) saw a 29% increase in revenues year over year (YoY) of the public cloud services market. Revenues from Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service–System Infrastructure Software (SaaS- SIS), and Software as a Service – applications totaled $408.6 billion in 2021.
The revenues came from the top 5 public cloud service providers (Microsoft, Amazon Web Services, Salesforce Inc., Google, and SAP), which captured nearly 40% of the worldwide total and grew 36.6% YoY. With offerings in all four deployment categories, Microsoft captured the top position in the overall public cloud services market with 14.4% share in 2021, followed closely by Amazon Web Services with 13.7% share.
“Organizations continued their strong adoption of shared public cloud services in 2021 to align IT investments more closely with business outcomes and ensure rapid access to the innovations required to be a digital-first business,” said Rick Villars, group vice president, Worldwide Research at IDC. “For the next several years, leading cloud providers will play a critical role in helping enterprises navigate the current storms of disruption (inflation, supply chain, and geopolitical tensions), but IT teams will also focus more on bringing greater financial accountability to the variable spend models of public cloud services.”
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Cloud is playing a critical role in the deployment of emerging technologies such as compute services, data/AI services, and app framework services as companies continue to innovate.
Foundational cloud services recorded a 38.5% growth which is much higher than the overall public cloud services market. Foundational cloud services support digital-first strategies and many organizations have either adopted or accelerated digital transformation over the last two years. IDC expects spending on foundational cloud services (especially IaaS and PaaS elements) to continue growing at a higher rate than the overall cloud market as enterprises leverage cloud to overcome the current disruptions and accelerate their shift toward digital business.
Digital-first
“In the digital-first world, enterprises that are serious about competing for the long term use the lens of business outcomes to evaluate strategic technology decisions, which fuels the fast-growing ecosystem seen in the public cloud market,” said Lara Greden, research director, Platform as a Service, IDC. “Cloud service providers showed relentless drive to enhance the productivity of developers and overall speed of application delivery, including an emphasis on containers-first and serverless-first approaches.”
IDC sees that the trend will continue as more and more organizations are getting more reliant on cloud services and the public cloud offer flexibility, especially to small enterprises.
IDC data showed that SaaS applications remain the largest and most mature segment of the public cloud, with 2021 revenues that have now reached $177 billion.
“Companies seek applications that will help increase enterprise intelligence, improve operational efficiency, and drive better decision-making,” said Eric Newmark, group vice president and general manager of IDC’s SaaS, Enterprise Software, and Worldwide Services division. “Ease of use, ease of implementation and integration, streamlined workflows, data and analytical accessibility, and time to value are the key criteria driving purchasing decisions, though verticalization has also steadily increased as a key priority.”