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Public Cloud Services Spending in Asia-Pacific rose 38% to $ 36.4 billion in 2020: Report

STRAP: China is said to be the largest market for public cloud services in 2020 in Asia/Pacific, followed by Australia and India. The overall growth is estimated to reach US$ 48 billion by 2021.

March 10, 2021 / 01:01 PM IST
L&T Infotech is currently building a separate team of cloud specialists to bring best expertise in the work.

L&T Infotech is currently building a separate team of cloud specialists to bring best expertise in the work.

Chinese, Australian and Indian companies took the lead in using digital transformation to deal with remote workers and online customers, helping them manage costs, withstand the pandemic and be more competitive as economic activity returns to pre-COVID levels, the International Data Corporation (IDC) said in a report.

Public cloud services spending soared 38% to $36.4 billion across the Asia-Pacific region excluding Japan in 2020, and is forecast to rise to $48.4 billion this year, according to the Worldwide Public Cloud Services Spending Guide of the IDC, it said in a statement from Singapore on March 10.

The guide evaluates cloud-services opportunities from a technology, industry and geography perspective to help IT decision makers understand the current trends and the outlook for five years.

Cloud Infrastructure as a service (IaaS) accounts for the most 48 percent of the overall public cloud spend in 2020 and is expected to continue at a high throughout the forecast period. Software as a Service (SaaS) was next with a share of 40 percent, followed by Platform as a service (PaaS) contributing 11 percent share.

“COVID-19 made us realize that no business is 100 percent invulnerable, however enterprises who were ahead on the digital transformation curve were able to sustain operations during the pandemic and recover well from the crisis than the laggards,” says Ashutosh Bisht, Senior Research Manager at IDC Asia/Pacific.

“During this time, cloud services became the underpinning technology, integrated with technologies such as DevOps, AI and BDA. Organizations were able to reimagine their business by continuously innovating and delivering to the end user,” he said.

The concept of cloud reliability, scalability, availability, reduced Capex Spend, and most importantly security is driving enterprises in the region to migrate to public cloud services with a renewed enthusiasm, states the IDC release.

Professional Services accounts for 15.2 percent of the share in the overall public cloud services spending, highest among the industries, during the forecast period of 2021-24. This is followed by Banking (10.4 percent) and Discrete Manufacturing (10.3 percent), with the top three industries accounting for one third of the overall public cloud services spending throughout the forecast period.

While construction and professional services are to see the fastest growth with a five-year CAGR of 39 percent and 35 percent respectively, the report highlights.

China with $19.4 billion spending is said to be the largest market for public cloud services in 2020 that will account for 53.4 percent of the Asia/Pacific (excluding Japan) total. Australia ($5.2 billion) will be second, followed by India ($3.5 billion) in third place.

The growth in adoption of services is attributed to openness of enterprises to accept cloud technology supplemented by government initiatives, presence of home-grown cloud as well as major global cloud providers in the region.

The report also said very large businesses with more than 1,000 employees would account for 37.1 percent of the Asia/Pacific (excluding Japan) total public cloud spending in 2020, followed 30.2 percent by medium-sized businesses having 100-499 employees, and 20.8 percent by large businesses with 500-999 employees.

"Both small and medium size businesses show fastest growth during the forecast period of around 34 percent in cloud investment as they were the hardest hit by pandemic and with the immediate need for business continuity, resiliency and growth," the release said.

The IDC’s spending guide quantifies public cloud computing purchases by cloud type for 20 industries and five company sizes across eight regions and 47 countries.

“Cloud services have addressed more than cost management challenges during the COVID-19 pandemic,” said Chris Morris, Vice President for APeJ Cloud & Partner Ecosystems research at IDC Asia/Pacific. “Cloud services and technologies have been the basis for the rapid introduction of new digital services to support remote workers and online customers, and it’s been the speed of implementation and low up-front costs that have enabled that,” he added.

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first published: Mar 10, 2021 01:01 pm