Public cloud services revenue to hit US$195 billion in 2020

Rebecca Gibson
Rebecca Gibson
By Rebecca Gibson on 30 August 2016
Public cloud services revenue to hit US$195 billion in 2020

Worldwide revenue from public cloud services will reach over US$195 billion in 2020, more than doubling the current market size, according to a new study from IDC.

IDC’s Worldwide Semiannual Public Cloud Services Spending Guide report predicted that Western Europe will continue to represent around a fifth of the global market, with revenues growing from US$15 billion in 2015 to US$38.6 billion in 2020.

In Western Europe, the UK will remain the largest market for public cloud services until 2020, generating nearly 30% of total revenue in the region. Germany and France follow in terms of size, with the three largest countries representing collectively around 64% of total revenue. Germany will see the strongest growth over the next five years, followed by some of the smaller countries, such as Ireland, Sweden, and Switzerland, which will gradually increase their share of the regional market.

Companies in the discrete manufacturing, banking and process manufacturing industry are currently the largest spenders, representing nearly 36% of cloud revenues in Western Europe. Utilities, insurance, and discrete manufacturing will see the fastest revenue growth in the region over the next five years.

"Public cloud services have changed how European organisations evaluate and select software. Aspects such as very fast rollouts, continuous upgrades, and ease of post-implementation reconfiguration are now top criteria for new application purchases,” said Bo Lykkegaard, associate vice president of software and cloud services trackers at IDC. "Some European countries have started the adoption of public cloud services later than others, due to concerns related to information security, data location, solution availability, and other issues. However, IDC foresees that the public cloud movement will sweep across all of Europe and that some markets of cautious adoption will outgrow the others over the next five years."

Software-as-a-service (SaaS), which comprises the service enablement of applications and system infrastructure software, accounted for 66.9% of all public cloud revenue in 2015. While SaaS will continue to represent the largest portion in 2020, spending on both platform-as-a-service and infrastructure-as-a-service solutions will grow at a faster rate.

"The flexibility, low initial cost, and ease of use provided by cloud deployments is reshaping the way companies select and buy new IT solutions,” said Serena Da Rold, senior research manager of customer insights and analysis at IDC. “Line of business managers are gaining a central role in selecting IT providers, and the focus across all industries is on how IT can meet specific business objectives. Cloud providers need to keep close to their target industries, strive to understand their business processes and key pain points, in order to offer clients in each segment the solution and features that meet their needs.”

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