Worldwide end-user spending on public cloud services is forecast to grow 20.7% to total $591.8 billion in 2023, up from $490.3 billion in 2022, according to the latest forecast from Gartner – up even more from the 18.8% growth forecast for 2022.
► Inflationary pressures creating a push and pull effect for cloud spending
Current inflationary pressures and macroeconomic conditions are having a ‘push and pull’ effect on cloud spending, said Sid Nag, Vice President Analyst at Gartner. ‘Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature.’
Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2023 at 29.8%. All segments are expected see growth in 2023. Gartner expects that Platform as a Service (PaaS) and software-as-a-service (SaaS) will see the most significant impacts from inflation due to staffing challenges and the focus on margin protection. However, both will grow with Gartner forecasting 23.2% for PaaS and 16.8% for SaaS in 2023.
‘Higher-wage and more skilled staff are required to develop modern SaaS applications, so organisations will be challenged as hiring is reduced to control costs,’ said Nag. ‘But since PaaS can facilitate more efficient and automated code generation for SaaS applications, the rate of PaaS consumption will consequently increase.’
“Despite growth, profitability and competition pressures, cloud spending will continue through perpetual cloud usage,” Nag added. “Once applications and workloads move to the cloud they generally stay there, and subscription models ensure that spending will continue through the term of the contract and most likely well beyond. For these vendors, cloud spending is an annuity – the gift that keeps on giving.”
Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)
| 2021 | 2022 | 2023 | |
|---|---|---|---|
| Cloud Business Process Services (BPaaS) | 54,952 | 60,127 | 65,145 |
| Cloud Application Infrastructure Services (PaaS) | 89,910 | 110,677 | 136,408 |
| Cloud Application Services (SaaS) | 146,326 | 167,107 | 195,208 |
| Cloud Management and Security Services | 28,489 | 34,143 | 41,675 |
| Cloud System Infrastructure Services (IaaS) | 90,894 | 115,740 | 150,254 |
| Desktop-as-a-Service (DaaS) | 2,059 | 2,539 | 3,104 |
| Total Market | 412,632 | 490,333 | 591,794 |
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 (October 2022)
Read more of our latest Cloud stories
