Organizations in Asia Pacific excluding Japan are adjusting to the new normal and reinventing themselves for both pandemic preparedness and competitiveness.
As economic activities return to pre-COVID levels, many enterprises are building new technology-enabled business models, with a focus to regain growth and have a technological edge over competitors.
Cloud has emerged as a core foundation of this renewed tech focus, leading to Asia Pacific public cloud services spending growth of over 38% to US$36.4 billion in 2020. Public cloud services spending in Asia Pacific is expected to reach US$48.4 billion in 2021, said IDC
"Cloud services have addressed more than cost management challenges during the COVID-19 pandemic. Cloud services and technologies have been the basis for the rapid introduction of new digital services to support remote workers and online customers, and it's been the speed of implementation and low up-front costs that have enabled that," said Chris Morris, vice president for APeJ Cloud & Partner Ecosystems research at IDC Asia Pacific.
Cloud infrastructure as a service (IaaS) is the top contributor to the overall public cloud spend in 2020, making around 48% of the overall spending.
IaaS spending across compute, storage, and networking will remain steady throughout the forecast with compute taking the major share of spending followed by storage. Software as a service (SaaS) is positioned as the second largest in terms of spending on cloud with a share of around 40%, followed by platform as a service (PaaS) with an 11% share in 2020.
The majority share of SaaS spending is coming from enterprises spending on cloud hosted applications. Software applications and system infrastructure software (SIS) are also contributing to SaaS spending. This is expected to further grow as enterprises leverage SaaS solutions that cover collaboration, productivity, and security to support remote working and innovations.
PaaS spending will be led by data management software, which will record a five-year CAGR of 41.2% during 2019-2024. IDC expects this trend to continue due to focus on business scalability, increased performance, security, and optimizing operations to create business resiliency and cap infrastructure costs.
Concept of cloud reliability, scalability, availability, reduced capex spend, and most importantly security is driving enterprises in the region to migrate to public cloud services with a renewed enthusiasm. Professional services (15% share), banking and discrete manufacturing (around 10% share each) are the top-3 industries accounting for one third of the overall public cloud services spending throughout the forecast period of 2021-24.
On a geographical perspective, China will be the largest market for public cloud services in 2020 with its US$19.4 billion spend that will account for about 53.4% of Asia Pacific total. Openness of enterprises to adopt cloud technology supplemented by government initiatives and presence of home-grown cloud service providers is boosting the adoption.
Australia (US$5.2 billion) and India (US$3.5 billion) will be in second and third place respectively in terms of cloud spending in the region driven by fast adoption across enterprises and presence of major global cloud providers of this technology in the region.
