Worldwide end-user spending on public cloud services is forecast to grow 23.1% in 2021 to total $332.3 billion, up from $270 billion in 2020, according to the latest forecast. “The events of last year allowed CIOs to overcome any reluctance of moving mission critical workloads from on-premises to the cloud,” said Sid Nag, research vice president at Gartner. “Even absent the pandemic there would still be a loss of appetite for data centers.

 “Emerging technologies such as containerization, virtualization and edge computing are becoming more mainstream and driving additional cloud spending. Simply put, the pandemic served as a multiplier for CIOs’ interest in the cloud.” 

Despite macroeconomic headwinds, offerings that support or deliver public cloud services are experiencing tremendous growth. Software as a service (SaaS) remains the largest market segment and is forecast to reach $122.6 billion in 2021 as the demand for composable applications requires a different type of SaaS experience (see Table 1). Infrastructure-as-a-service (IaaS) and desktop-as-a-service (DaaS) will see the highest growth in 2021, 38.5% and 67.7% respectively, as CIOs face continued pressures to scale infrastructure that supports moving complex workloads to the cloud and the demands of a hybrid workforce.

Cloud spending driven by emerging technologies becoming mainstream 

Worldwide Public Cloud Services End-User Spending Forecast (Millions of US Dollars)

BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service

The pandemic served as a multiplier for CIOs’ interest in the cloud

As organizations mobilize for a massive global effort to produce and distribute COVID-19 vaccinations, SaaS based applications that enable essential tasks such as automation and supply chain is critical. Such applications continue to demonstrate reliability in scaling vaccine management, which in turn will help CIOs further validate the ongoing shift to cloud.

“It’s important to note that the usage and adoption of cloud that served enterprises well during the ongoing crisis will not look the same in the coming years,” said Nag. “It will further evolve from serving pedestrian use cases such as infrastructure and application migration, to those that combine cloud with technologies such as artificial intelligence, the Internet of Things, 5G and more.

“In other words, cloud will serve as the glue between many other technologies that CIOs want to use more of, allowing them to leapfrog into the next century as they address more complex and emerging use cases. It will be a disruptive market, to say the least.”