Public cloud revenue to grow 6.3% in 2020 — Gartner

Public cloud revenue is forecast to grow 6.3% in 2020 to total $257.9 billion, up from $242.7 billion in 2019, according to Gartner.

Within the worldwide public cloud services market, Desktop-as-a-Service (DaaS) is expected to have the most significant growth in 2020, increasing 95.4% to $1.2 billion.

DaaS offers an inexpensive option for organisations that are supporting the surge of remote workers and their need to securely access enterprise applications from multiple devices and locations.

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

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

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Software-as-a-Service (SaaS) remains the largest public cloud market segment and is forecast to grow to $104.7 billion in 2020 (see Table 1).

The continued shift from on-premises license software to subscription-based SaaS models, in parallel with the increased need for new software collaboration tools during Covid-19, is driving SaaS growth.

The second-largest market segment is cloud system infrastructure services, or Infrastructure-as-a-Service (IaaS), which is forecast to grow 13.4% to $50.4 billion in 2020.

Gartner suggests that the effects of the global economic downturn are intensifying organisations’ urgency to move off legacy infrastructure operating models.

Source: Gartner (July 2020).

The boost to public cloud revenue via it’s variety of services serve as the one bright spot in the outlook for IT spending in 2020.

Cloud spending in many regions is expected to grow rapidly as economies reopen and more normal economic activity resumes, with regions such as North America expecting to return to higher spending levels as early as 2022.

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“The use of public cloud services offers CIOs two distinct advantages during the Covid-19 pandemic: cost scale with use and deferred spending,” continued 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.”

He added: “Any debate around the utility of public cloud has been put aside since the onset of Covid-19. 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.”

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.