Global spending on cloud services to surpass $1 trillion in 2024
The COVID-19 pandemic has largely proven to be an accelerator of cloud adoption and extension and will continue to drive a faster conversion to cloud-centric IT.
Global spending on cloud services to rise
According to IDC, total global spending on cloud services, the hardware and software components underpinning cloud services, and the professional and managed services opportunities around cloud services will surpass $1 trillion in 2024 while sustaining a double-digit compound annual growth rate (CAGR) of 15.7%.
“Cloud in all its permutations – hardware/software/services/as a service as well as public/private/hybrid/multi/edge – will play ever greater, and even dominant, roles across the IT industry for the foreseeable future,” said Richard L. Villars, Group VP, Worldwide Research at IDC.
“By the end of 2021, based on lessons learned in the pandemic, most enterprises will put a mechanism in place to accelerate their shift to cloud-centric digital infrastructure and application services twice as fast as before the pandemic.”
Strongest growth in the as a service category
The strongest growth in cloud revenues will come in the as a service category – public (shared) cloud services and dedicated (private) cloud services. This category, which is also the largest category in terms of overall revenues, is forecast to deliver a five-year CAGR of 21.0%.
By 2024, the as a service category will account for more than 60% of all cloud revenues worldwide. The services category, which includes cloud-related professional services and cloud-related management services, will be the second largest category in terms of revenue but will experience the slowest growth with an 8.3% CAGR. This is due to a variety of factors, including greater use of automation in cloud migrations.
The smallest cloud category, infrastructure build, which includes hardware, software, and support for enterprise private clouds and service provider public clouds, will enjoy solid growth (11.1% CAGR) over the forecast period.
Factors driving the cloud market forward
While the impact of COVID-19 could have some negative effects on cloud adoption over the next several years, there are a number of factors that are driving the cloud market forward.
- The ecosystem of tech companies helping customers migrate to cloud environments, create new innovations in the cloud, and manage their expanding cloud environments will enable enterprises to meet their accelerated schedules for moving to cloud.
- The emergence of consumption-based IT offerings are aimed at leveraging public cloud-like capabilities in an on-premises environment that reduces the complexity and restructures the cost for enterprises that want additional security, dedicated resources, and more granular management capabilities.
- The adoption of cloud services should enable organizations to shift IT from maintenance of legacy IT to new digital transformation initiatives, which can lead to new business revenue and competitiveness as well as create new opportunities for suppliers of professional services.
- Hybrid cloud has become central to successful digital transformation efforts by defining an IT architectural approach, an IT investment strategy, and an IT staffing model that ensures the enterprise can achieve the optimal balance across dimensions without sacrificing performance, reliability, or control.