Worldwide public cloud end-user spending to reach nearly $500bn in 2022: Report

DUBAI: Worldwide end-user spending on public cloud services is forecast to grow 20.4 per cent 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 reach nearly $600 billion.

“Cloud is the powerhouse that drives today’s digital organisations,” said Sid Nag, research vice president at Gartner. “CIOs are beyond the era of the 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 end-user spending growth in 2022 at 30.6 per cent, followed by desktop-as-a-service (DaaS) at 26.6 per cent and platform-as-a-service (PaaS) at 26.1 per cent. The new reality of hybrid work is prompting organizations to move away from powering their workforce with traditional client computing solutions, such as desktops and other physical in-office tools, and toward DaaS, which is driving spending to reach $2.6 billion in 2022. Demand for cloud-native capabilities by end-users accounts for PaaS growing to $109.6 billion in spending.

“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 fueling 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, for example via cloud marketplaces, and continue to break up larger, monolithic applications into composable parts for more efficient DevOps processes.

In MENA, end-user spending on the public cloud will total $5.8 billion in 2022, growing 18.8 per cent from 2021. Cloud system infrastructure services (IaaS) are forecast to record the highest growth in 2022 (39 per cent), followed by cloud application infrastructure services (PaaS). Cloud application services (SaaS) are forecast to be the highest spending vertical for end-users in MENA in 2022.

Emerging technologies in cloud computing such as hyper-scale 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.

“Driven by the maturation of core cloud services, the focus of differentiation is gradually shifting to capabilities that can disrupt digital businesses and operations in enterprises directly,” 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.