APEJ public cloud market to surpass $10b by year-end: IDC

Staff writer
26 Jul 2017
00:00
News
Daily News

The public cloud services (PCS) market in Asia/Pacific excluding Japan (APEJ) is expected to exceed the $10 billion mark in 2017, according to IDC Asia/Pacific's latest IDC Worldwide Semiannual Public Cloud Services Tracker.

IaaS spending in the region will grow 35.8% year on year to $4.8 billion in 2017, IDC predicts. Spending on SaaS and Platform-as-a-service (PaaS) in the region, meanwhile, are also expected to grow significantly - by 29.0% and 37.2% respectively YoY.

"Digital transformation is driving multi-cloud and hybrid IT environments for enterprises to create a more agile and cost-effective IT environment. Even heavily regulated industries like banking and finance are using Software-as-a-service (SaaS) for non-core functionality, PaaS for app development and testing, and IaaS for workload trial runs and testing for their new service offerings,” said Liew Siew Choon, senior market analyst, IDC Asia/Pacific's services research team.

"As enterprises are exploring different cloud options for different workloads, most enterprises have hybrid IT strategies with dispersed IT assets and workloads across onsite and offsite datacenters. The modern applications that support innovation accelerators such as Internet of Things (IoT) and cognitive systems will further increase the adoption of public cloud services,” Liew continued.

IDC also forecast that IaaS spending will surpass Software-as-a-service (SaaS) spending for the first time in the first half of 2017, accounting for nearly 48% of the total public cloud service spending in 2017, followed by SaaS (45.6%) and PaaS (6.6%)

"With data growth at an exponential rate, a scalable and rapid processing infrastructure from IaaS providers is increasingly demanded by enterprises for better resource utilization and cost savings,” Liew added.

Meanwhile, the top three PCS providers in APEJ region in 2016 are Amazon Web Services, Microsoft, and Alibaba Group with over 50% market share, thanks to their credible IaaS offerings, as well as PaaS and SaaS offerings.

According to Liew, Microsoft’s IaaS revenue contribution has also surpassed SaaS (which is mainly Office 365) (O365) revenue contribution by end of 2016. Contrary to popular belief, Microsoft’s public cloud revenue is actually gaining more from Azure apart from O365 in APEJ.

Another driver of growth is risk management, whereby IaaS has been used tremendously for data backup and disaster recovery. In countries like China, the government initiative for cloud development is focusing on cloud infrastructure and leveraging internet services providers to promote the public cloud services, the research firm noted.

Related content