The Asia-Pacific excluding Japan and China (APeJC) public cloud services (PCS) market — which includes infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS) — reached $32.5 billion in 2022, with a year-on-year (YoY) growth of 25.3%, according to analyst firm IDC.
The SaaS market remained as the largest segment occupying more than 60% of the total public cloud services market in 2022.
The smallest market segment was from PaaS, making up less than 15% of the total PCS market share. However, the PaaS market experienced the highest growth with a YoY growth of 45.1% in 2022, driven by artificial intelligence (AI) platforms, data management software, and application platforms.
IDC said the shift to digital business is driving more public cloud services consumption as organizations increasingly leverage PCS to shorten time-to-market and build data-driven business models for better decision-making, personalize and innovate offerings, and create more interactive customer engagements.
IDC noted that security and compliance is a lesser concern in adopting public cloud services. Organizations are aware of the shared responsibility model and understand that the public cloud environment can be more secure and cost-efficient than the on-premises environment, it added.
With major public cloud services certified with global security standards and compliances, including specific industry compliances, PCS adoption is growing rapidly in regulated industries.
A significant trend can be seen in the digital banking space, with a large number of virtual and traditional banks using PCS to launch their digital banking services while meeting the requirements from the authorities.
Hence, looking for cloud services providers that comply with global security standards and compliances is one of the major criteria in vendor selection, IDC said
The top five PCS vendors in APeJC are (in alphabetical order) Amazon Web Services (AWS), Google, Microsoft, Salesforce, and SAP, which captured more than 40% of the total market share in 2022.
China-based vendors like Alibaba Group and Huawei are focusing more on Southeast Asia and mainly competing with the global players in the IaaS market although they also have PaaS and SaaS offerings.
In 2023, IDC expects the overall PCS market will be slightly impacted from the sluggish global economic condition as organizations will be more focused on cost-optimization and cautious on launching new large-scale cloud projects.
“Organizations will examine any excessive cloud spending and continue to modernize any legacy systems with public cloud. Automation will be the key focus area, with solutions like serverless computing, robotic process automation (RPA) software, and artificial intelligence/machine learning (AI/ML) tools, to streamline both business and IT operations and drive costs down,” says Liew Siew Choon, senior research manager for IT Services at IDC Asia-Pacific.
The total APeJC PCS market size is forecast to be at $39.4 billion in 2023, with YoY growth of 21.3%, and will reach $83.1 billion in 2027, with a five-year compound annual growth rate (CAGR) of 20.6%.