According to a recent update from International Data Corporation, over four years, $1.35 trillion will be spent on cloud services worldwide.

IDC predicts that global spending on cloud services will grow to $1.35 trillion by 2027. The company arrives at this prediction using its own spending guide. The guide covers 28 industries and five company sizes in 53 countries and nine regions.

Basic Reasons

According to Eileen Smith, Program VP for Data and Analytics at IDC, cloud is currently dominating technology spend across various business aspects such as infrastructure, platforms and applications. Cost efficiency plays an important role here.

Currently, she believes cloud models remain ideally placed to meet needs such as innovation in the development and delivery of new applications. This ranges from AI and machine learning to over-edge environments and data management.

Important Industries

By 2027, banking, telecom, and software and information services are expected to be the top three industries, accounting for $326 billion in cloud spending. Until then, the top 5 will be completed by retail, professional and personal services. These five will account for 36 percent of global cloud spending.

According to IDC, the fastest growing sectors in terms of cloud spending are:

• Software and information services – 24 percent
• Capital markets – 21.9 percent
• Telecommunications – 21.8 percent

In fact, IDC believes that only one industry will see a non-double-digit increase, and that’s customer service.

service-wise

SaaS applications will be the largest spend item, accounting for forty percent. However, with an increase of 15.8 percent, it will also be the weakest growth. The main SaaS applications are increasingly those for managing corporate resources and those for customer relationships.

Second in terms of spending will be IaaS, while PaaS completes the top three spots. Platform-as-a-Service will be the largest increase at 27.2 percent. Here, too, Infrastructure-as-a-Service is in second place with growth of 23.5 percent.

Systems infrastructure software, a form of SaaS, will be the smallest expense at 15 percent. Another form of software-as-a-service is security, and this will be the largest in this category. Surprisingly, however, IDC did not give a number for this.

Regional

We also looked at the geographic factor in the potential growth in cloud spending. According to IDC, these top three will be:

• United States – $697 billion
• Western Europe – $273 billion
• China – $117 billion

Latin America will be the fastest growing region, up 29.1 percent. China is second at 26.9 percent.

These positive forecasts are consistent with the results of the cloud market after the second quarter of this year. Gartner also published positive data on the cloud last month.