Spending on public cloud services and infrastructure will reach $266 billion in 2021, according to new research from International Data Corporation (IDC). That's a 21% growth rate over the next five years.
Public cloud services spending alone will reach $128 billion this year, an increase of over 25% over 2016, IDC reports.
The United States will make up 60% of global cloud spending, totaling $163 billion in 2021. Western Europe and Asia/Pacific will be the second and third largest regions. Software as a Service (SaaS) will remain the dominant cloud computing type, led by Customer relationship management (CRM) applications and enterprise resource management (ERM) applications.
Discrete manufacturing, professional services and banking are the U.S. industries that will spend the most on public cloud services. The three industries combined will account for almost one third of all public cloud services spending in the United States in 2021. "Much of the public cloud services growth in these industries is coming from new projects and initiatives from functional areas like customer service and sales,” said Eileen Smith, program director, Customer Insights and Analysis, in a press release.
Companies use 16 SaaS apps on average today, up 33% from last year, according to BetterCloud's 2017 State of the SaaS-Powered Workplace Report, released in May. Over 70% of organizations surveyed said nearly all of their apps will be SaaS by 2020, according to the report.
SaaS can help companies smooth out revenues, which can lead to better and more sustainable investment decisions and ultimately allow a company to deliver better service and products to clients.
But SaaS may not be the leading cloud services for long. IDC says spending on Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) will outpace SaaS over the next several years, each growing at about 30% annually. PaaS is seeing growing enterprise interest as more companies build custom applications. According to data released by Synergy Research Group last fall, database, IoT and analytics PaaS segments will see growth of 100% or more each year for the next several years.
When it comes to IT spending overall, however, it really is all about cloud today. Another recent IDC study found cloud infrastructure is growing much faster than traditional IT infrastructure, which dropped 4.6% in 2017, accounting for 58.7% of the overall end-user spending on IT infrastructure products.