IDC forecasts that the Asia/Pacific excluding Japan and China (APeJC) public cloud services (PCS) market to reach US$32.5 billion in 2022, with a year-on-year (YoY) growth of 25.3%. PCS includes infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS).
According to IDC's Worldwide Semiannual Public Cloud Services Tracker, 2H22, the SaaS market remained the largest segment occupying more than 60% of the total public cloud services market in 2022. The smallest market segment was PaaS, making up less than 15% of the total PCS market share.
However, the PaaS market experienced the highest growth with a YoY growth of 45.1% in 2022, driven by artificial intelligence (AI) platforms, data management software, and application platforms.
With major public cloud services certified with global security standards and compliances, including specific industry compliances, PCS adoption is growing rapidly in regulated industries.
A significant trend can be seen in the digital banking space, with many virtual and traditional banks using PCS to launch their digital banking services while meeting the requirements of the authorities.
Hence, looking for cloud service providers that comply with global security standards and compliances is one of the major criteria in vendor selection.
"Organisations will examine any excessive cloud spending and continue to modernise any legacy systems with public cloud," says Liew Siew Choon, senior research manager, IT Services, IDC Asia/Pacific.
Trending
"Automation will be the key focus area, with solutions like serverless computing, robotic process automation (RPA) software, and artificial intelligence/machine learning (AI/ML) tools, to streamline both business and IT operations and drive costs down.
Liew Siew Choon
The shift to digital business is driving more public cloud services consumption as organisations increasingly leverage PCS to shorten time-to-market and build data-driven business models for better decision-making, personalise, and innovate offerings, and create more interactive customer engagements.
Security and compliance are a lesser concern in adopting public cloud services. Organisations are aware of the shared responsibility model and understand that the public cloud environment can be more secure and cost-efficient than the on-premises environment.
Competitive landscape
The top five PCS vendors in APeJC are (in alphabetical order) Amazon Web Services (AWS), Google Cloud, Microsoft Azure, Salesforce, and SAP, which captured more than 40% of the total market share in 2022.
China-based vendors like Alibaba Group and Huawei are focusing more on Southeast Asia and mainly competing with the global players in the IaaS market although they also have PaaS and SaaS offerings.
In 2023, IDC expects the overall PCS market will be slightly impacted by the sluggish global economic condition as organisations will be more focused on cost-optimisation and cautious about launching new large-scale cloud projects.
The total APeJC PCS market size is forecast to be at US$39.4 billion in 2023, with YoY growth of 21.3%, and will reach US$83.1 billion in 2027, with a five-year compound annual growth rate (CAGR) of 20.6%.
