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Public cloud spending and revenues to soar in 2020

24 Jul 2020

While financial hardship permeates many markets across the world due to COVID-19, the same cannot be said of the worldwide public could services industry, which is set to grow by 6.3% in 2020, according to new data from Gartner.

The sector will see its revenues grow from US$243 billion in 2019 to $258 billion this year, in no small part due to the expanded need for remote working capabilities and other services facilitated by public clouds. 

While software-as-a-service (SaaS) is expected to remain the largest market segment in the industry, desktop-as-a-service (DaaS) is slated to have the most significant growth this year, swelling by a huge 95.4% to $1.2 billion. 

Gartner says this can be attributed to its status as an inexpensive option for organisations seeing a boom in remote working, with the service allowing users to securely access enterprise programmes from remote locations and devices.

SaaS, on the other hand, is forcast to grow to $104.7 billion in 2020. This is indicative of the shift from on-premises software to subscription-based SaaS models, as well as the growing need for new collaboration tools amidst the pandemic.

After SaaS, the second-largest market is infrastructure-as-a-service, slated to grow by 13.4% to $50.4 billion this year. Gartner says this growth can be attributed to the increasingly pessimistic global economic outlook, which is bolstering an urgency among organisations around the world to move away from legacy infrastructure operating models.

“When the COVID-19 pandemic hit, there were a few initial hiccups, but cloud ultimately delivered exactly what it was supposed to,” says Gartner research vice president Sid Nag.

“It responded to increased demand and catered to customers’ preference of elastic, pay-as-you-go consumption models.”

The report comes as spending on cloud grows in many regions despite economic concerns. More optimism is projected, however, when markets begin reopening and returning to normal economic activity. 

“The use of public cloud services offer CIOs two distinct advantages during the COVID-19 pandemic: cost scale with use and deferred spending,” says Nag. 

“CIOs can invest significantly less cash upfront by utilising cloud technology rather than scaling up on-premises data centre capacity or acquiring traditional licensed software.

“Any debate around the utility of public cloud has been put aside since the onset of COVID-19,” he says.

“For the remainder of 2020, organisations that expand remote work functionality will prioritise collaboration software, mobile device management, distance learning educational solutions and security, as well as the infrastructure to scale to support increased capacity.”