Gartner Forecasts Worldwide Public Cloud End-User Spending to Grow 18% in 2021

Proportion of Enterprise IT Spending on Public Cloud Computing Continues to Increase

Worldwide end-user spending on public cloud services is forecast to grow 18.4% in 2021 to total $304.9 billion, up from $257.5 billion in 2020, according to Gartner, Inc.

“The pandemic validated cloud’s value proposition,” said Sid Nag, research vice president at Gartner. “The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”

The proportion of IT spending that is shifting to cloud will accelerate in the aftermath of the COVID-19 crisis, with cloud projected to make up 14.2% of the total global enterprise IT spending market in 2024, up from 9.1% in 2020.

Although software as a service (SaaS) remains the largest market segment and is forecast to grow to $117.7 billion in 2021, application infrastructure services (PaaS) is anticipated to grow by a higher margin at 26.6% (see Table 1). The increased consumption of PaaS is driven by the need for remote workers to have access to high performing, content-rich and scalable infrastructure to perform their duties, which largely comes in the form of modernized and cloud-native applications.

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

  2019 2020 2021 2022
Cloud Business Process Services (BPaaS) 45,212 44,741 47,521 50,336
Cloud Application Infrastructure Services (PaaS) 37,512 43,823 55,486 68,964
Cloud Application Services (SaaS) 102,064 101,480 117,773 138,261
Cloud Management and Security Services 12,836 14,880 17,001 19,934
Cloud System Infrastructure Services (IaaS) 44,457 51,421 65,264 82,225
Desktop as a Service (DaaS) 616 1,204 1,945 2,542
Total Market 242,696 257,549 304,990 362,263

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 (November 2020)

“The COVID-19 pandemic forced organizations to quickly focus on three priorities: preserve cash and optimize IT costs, support and secure a remote workforce, and ensure resiliency,” said Mr. Nag. “Investing in cloud became a convenient means to address all three of these needs.”

In fact, recent Gartner survey data indicates that almost 70% of organizations using cloud services today plan to increase their cloud spending in the wake of the disruption caused by COVID-19.

As enterprises increase investments in mobility, collaboration, and other remote working technologies and infrastructure, Gartner expects growth in public cloud to be sustained through 2024. The rising trend of cloud service providers partnering with telecommunications companies to extend their reach into the edge and support a hybrid workforce may also lead to further market growth.

“As CIOs think more strategically about how to lay the foundations to support a return to growth, it is clear that the move to digital and associated services will play a big role for organizations in the future,” said Mr. Nag. “Cloud adoption therefore becomes a significant means to stay ahead in a post-COVID-19 world focused on agility and digital touchpoints.”

Gartner clients can read more in the report “Forecast: Public Cloud Services, Worldwide, 2018-2024, 3Q20 Update.” Learn more about how to Reset your business strategy section on gartner.com. Complimentary research, insights and webinars are offered to help leaders build resilience on their path to business recovery.

Learn more about how to lead organizations through the disruption of coronavirus in the Gartner coronavirus resource center, a collection of complimentary Gartner research and webinars to help organizations respond, manage and prepare for the rapid spread and global impact of COVID-19.

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