Worldwide public cloud end-user spending to reach almost $500 billion this year

Worldwide end-user spending on public cloud services is forecast to grow 20.4% in 2022 to total $494.7 billion, up from $410.9 billion in 2021, according to the latest forecast from Gartner. In 2023, end-user spending is expected to be close to $600 billion.

► IaaS, DaaS and PaaS will all see growth of more than 25%

► CIOs moving on from ‘irrational exuberance’ to make more thoughtful choices

► IT leaders who see cloud as an enabler rather than an end state will be the most successful with DX

Sid Nag, research vice president at Gartner, said: ‘Cloud is the powerhouse that drives today’s digital organisations. CIOs are beyond the era of irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey.’

Infrastructure-as-a-service (IaaS) is forecast to experience the highest spending growth at 30.6%, followed by desktop-as-a-service (DaaS) at 26.6% and platform-as-a-service (PaaS) at 26.1% (see Table 1).

The new reality of hybrid work is prompting organisations to move away from traditional client computing solutions driving spending on DaaS to $2.6 billion this year. Demand for cloud-native capabilities will see PaaS spending grow to $109.6 billion.

Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service;
SaaS = software as a service. Note: Totals may not add up due to rounding.
Source: Gartner (April 2022)

‘Cloud native capabilities such as containerisation, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditised compute such as IaaS or network-as-a-service,’ said Nag. ‘As a result, they are generally more expensive which is fuelling spending growth.’

SaaS remains the largest public cloud services market segment, forecasted to reach $176.6 billion in end-user spending in 2022. Gartner expects steady velocity within this segment as enterprises take multiple routes to market with SaaS via cloud marketplaces, and continue to break up larger, monolithic applications into composable parts for more efficient DevOps processes.

Emerging cloud technologies such as hyperscale edge computing and secure access service edge (SASE) are disrupting adjacent markets and forming new product categories, creating additional revenue streams for public cloud providers.

Market maturity is changing what customers look for, shifting the emphasis to capabilities that have a more direct impact on businesses, said Nag. ‘Public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty. IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys. The organisations combining cloud with other adjacent, emerging technologies will fare even better.’

You can find out more in Forecast: Public Cloud Services, Worldwide, 2020-2026, 1Q22 Update. Learn more in the complimentary Gartner webinar Cloud Computing Scenario: The Future of Cloud.