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IDC predicts IaaS, PaaS revenues to grow faster than SaaS in five years to 2020.
Global spending on public cloud services will reach US$195 billion by 2020, compared to nearly $70 billion in 2015 and an estimated $96.5 billion this year, predicted IDC this week.
According to the research firm, that represents a compound annual growth rate (CAGR) of 20.4% between 2015 and 2020.
"Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets," said Benjamin McGrath, a senior research analyst covering software-as-a-service (SaaS) and business models at IDC.
IDC said SaaS and platform-as-a-service (PaaS) together accounted for 83.7% of all public cloud revenue in 2015, while infrastructure-as-a-service (IaaS) accounted for the remaining 16.3%. However, growth in IaaS and PaaS spending is expected to outpace SaaS spending growth over the forecast period, expanding their share of overall revenues.
Discrete manufacturing, banking and professional services are the leading industry verticals when it comes to public cloud spending; IDC expects them to account for a third of worldwide revenues in 2016.
"By 2020, about half of all new business software purchases will be of service-enabled software, and cloud software will constitute more than a quarter of all software sold," McGrath predicted.
"Organisations across all industries are now free to adapt to market changes quicker and take more risks, as they are no longer bound by legacy IT constraints," added Eileen Smith, programme director, customer insights and analysis, at IDC.
On a geographic basis, the U.S. is expected to represent the largest market for public cloud services, generating two thirds of global revenues during the forecast period, followed by Western Europe and Asia Pacific, excluding Japan.
