Worldwide revenue for the public cloud services market totaled $669.2 billion in calendar year 2023, an increase of 19.9% compared to 2022, according to new data from IDC.
The largest source of public cloud services revenue in 2023 was Software as a Service – Applications (SaaS – Applications), which accounted for nearly 45% of the market total.
Infrastructure as a Service (IaaS) was the second largest revenue category with 19.9% of the total while Platform as a Service (PaaS) and Software as a Service – System Infrastructure Software (SaaS – SIS) delivered 18.4% and 17.0% of overall revenue respectively. PaaS and SaaS – SIS were the categories with the fastest year-over-year revenue growth.
IDC forecasts worldwide public cloud services revenue will surpass $800 billion in 2024, an increase of 20.5% over 2023 with a similar increase expected in 2025.
While the annual rate of growth will slow slightly over the forecast period, the market is still forecast to deliver a five-year compound annual growth rate (CAGR) of 19.5% with worldwide revenues reaching $1.6 trillion in 2028.
“The mainstreaming of AI is driving organizations to rethink their infrastructure strategy,” said Dave McCarthy, research vice president for Cloud and Edge Infrastructure Services at IDC.
“Public cloud IaaS will be an attractive source for AI-ready infrastructure as cloud service providers are heavily investing in the high-performance compute, storage, and networking services needed for AI workloads. The on-demand and pay-as-you-go tenets of cloud infrastructure facilitate access to the latest AI technology without large upfront investments or supply chain delays.”
