APAC public cloud spend to hit US$15B

Asia-Pacific chalked up US$7 billion in public cloud services expenditure last year, led by the discrete manufacturing industry, and is expected to reach US$15 billion by 2019.
Written by Eileen Yu, Senior Contributing Editor

The Asia-Pacific region, excluding Japan, is expected to spend US$15 billion on public cloud services in 2019, clocking a compound annual growth rate (CAGR) of 22.9 percent.

According to IDC's latest figures, this would be almost six times the growth rate of the region's overall IT spend and double that of 2015's figure. Last year, public cloud services chalked up nearly US$7 billion, with the discrete manufacturing industry leading total expenditure at US$955 million.

Telcos were next, forking out US$928 million on such services, and were expected to be the fastest-growing vertical at 29.2 percent for the forecast period of 2014 to 2019. IDC said this industry segment would outpace discrete manufacturing to lead the region's public cloud services spending by 2019.

The banking sector was the third-largest spender last year, investing US$744 million.

Asia-Pacific's CAGR over the forecast period also would be higher than the global growth rate of 19.4 percent, according to IDC.

"Cloud services will remain the essential foundation of the IT industry's third platform of innovation and growth," said IDC's Asia-Pacific research manager for customer insights and analysis, Rubal Sabharwal. "As the cloud market enters an 'innovation stage', there will be an explosion of new solutions and value creation on top of the cloud."

"Industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements. With the huge increase in the number and diversity of services available in the market, organisations across the industries will shift steadily towards cloud-first strategies to enable digital transformation," added Sabharwal.

The region's spending on infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) would climb at a faster rate than SaaS (software-as-a-service), registering a five-year CAGR of 28.9 percent and 21.2 percent, respectively. SaaS, however, would remain the primary cloud service through to 2019, when IaaS spending would take over as the leading cloud segment.

IDC's Asia-Pacific vice president for cloud services research Chris Morris explained that the software industry had been transitioning towards an SaaS-enabled deployment model over the past few years. "By 2018, most software vendors will have fully shifted to a SaaS/PaaS code base," he said.

"This means that many enterprise software customers will be offered SaaS as the preferred option, as they reach their next major software upgrade decisions," Morris noted. "Put together, new solutions born on the cloud and traditional solutions migrating to the cloud will steadily pull more customers and their data to the cloud."

Editorial standards