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Gartner: Public Cloud End-User Spend Surges 20%

April 19, 2022

IaaS, DaaS and PaaS to Witness Highest Spending Growth 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 reach nearly $600 billion.

“Cloud is the powerhouse that drives today’s digital organizations,” said
Sid Nag, research vice president at Gartner. “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 end-user spending growth in 2022 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 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.

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

 

2021

2022

2023

Cloud Business Process Services (BPaaS)

51,410

55,598

60,619

Cloud Application Infrastructure Services (PaaS)

86,943

109,623

136,404

Cloud Application Services (SaaS)

152,184

176,622

208,080

Cloud Management and Security Services

26,665

30,471

35,218

Cloud System Infrastructure Services (IaaS)

91,642

119,717

156,276

Desktop as a Service (DaaS)

2,072

2,623

3,244

Total Market

410,915

494,654

599,840

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 containerization, database platform-as-a-service (dbPaaS) and artificial intelligence/machine learning contain richer features than commoditized 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.

Emerging technologies in cloud computing 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.

“Driven by 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.

“IT leaders who view the cloud as an enabler rather than an end state will be most successful in their digital transformational journeys,” said Nag. “The organizations combining cloud with other adjacent, emerging technologies will fare even better.”

It is also for this reason that leading ISVs like IRI, The CoSort Company read/write data in Amazon S3, Azure Blob, and GCP file stores, and can execute jobs on LUW servers or VMs in AWS, Azure, GCP and OCI. By way of example, IRI Voracity software users can migrate, integrate, clean and mask data between on-premise and cloud environments, and provide test data directly within Amazon CodePipeline, Azure DevOps and GitLab in Google Cloud.

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