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Asia public cloud services market to exceed USD 10 bln in 2017

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The public cloud services (PCS) market in Asia/Pacific excluding Japan (APEJ) is expected to exceed the US$10 billion mark in 2017, says IDC Asia/Pacific in its latest IDC Worldwide Semiannual Public Cloud Services Tracker. Infrastructure-as-a-service (IaaS) will drive the growth of the PCS market and will lead to IaaS spending surpassing Software-as-a-service (SaaS) spending in 2017 for the first time in the first half of 2017.

“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 SaaS for non-core functionality, Platform-as-a-service (PaaS) for app development and testing, and IaaS for workload trial runs and testing for their new service offerings,” says Liew Siew Choon, Senior Market Analyst, IDC Asia/Pacific’s Services Research team.

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“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.

The top three PCS providers in APEJ region in 2016 are Amazon Web ServicesMicrosoft, and Alibaba Group with over 50% market share.

Liew added “These top providers have very credible IaaS offerings, as well as PaaS and SaaS offerings. For Microsoft, its 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.

The latest IDC Worldwide Semiannual Public Cloud Services Tracker also estimate that IaaS spending will reach US$4.8 billion in APEJ in 2017 driven by a 35.8% year-on-year (YoY) growth from previous year. SaaS and PaaS spending in the region is also expected to grow significantly YoY by 29.0% and 37.2% respectively.

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“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.

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 recent three-year (2017-2019) action plan for cloud development in China is still centered around cloud infrastructure as a foundation of transformation and development.

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