End-user spending on public cloud services in India to grow 25 percent in 2020: Gartner

This double-digit growth will position India as the No. 3 country for end-user spending on public cloud services. 

Gartner Nov 05th 2019 A-A+
cloud-spending_1.jpg

End-user spending on public cloud services in India is forecast to total $3.4 billion in 2020, a 25% increase from 2019, according to Gartner (see Table 1). This double-digit growth will position India as the No. 3 country for end-user spending on public cloud services. China and Indonesia will be the countries with the highest growth rates in end-user spending on public cloud services in 2020.

“Moving to the cloud and investing in public cloud services have become imperative to the success of digital business initiatives. It’s no longer a question of ‘why’, but a matter of ‘when’ organizations can shift to the cloud,” said Sid Nag, research vice president at Gartner. “We have entered the cloud 2.0 era, where organizations are adopting a cloud-first or a cloud-only strategy.”

Cloud application services (SaaS) remains the segment where end-user organizations in India will spend the most and will represent 42% of overall public cloud services end-user spending in 2020 (see Table 1). End-user spending on SaaS cloud application services in India will total $1.4 billion in 2020, an increase of more than 21% year over year.

Table 1. India: Public Cloud Services End-User Spending Forecast, 2018-2020 (Millions of Dollars)

 Segment

2018

2019

2020

Cloud Application Infrastructure Services (PaaS)

284

363

461

Cloud Application Services (SaaS)

900

1,105

1,364

Cloud Business Process Services (BPaaS)

172

189

212

Cloud Management and Security Services

187

228

274

Cloud System Infrastructure Services (IaaS)

558

744

996

Total Revenue

2,101

2,630

3,307

Note: Due to rounding, figures may not add up precisely to the totals shown.
Source: Gartner (November2019)

Organizations are moving their legacy applications to SaaS because SaaS provides them with the flexibility of subscription-based consumption, in contrast to expensive license-based on-premises consumption models. “SaaS adoption is associated with a lower cost of entry, which is one of the reasons for the high investment in this segment in India, which is a price-sensitive market,” said Nag. 

The next wave of changes that Indian CIOs foresee is consolidation in the cloud services market. “The disinvestment in data centres by small and niche cloud service providers has increased the opportunities for hyperscale vendors, such as Amazon Web Services, Microsoft and Alibaba, to disrupt the cloud infrastructure services market rapidly,” said Nag. 

Market leaders such as Google, Amazon, Microsoft, Alibaba and IBM currently dominate global cloud infrastructure services market, and will retain the lead as the market grows.

Gartner predicts that, by 2021, 90% of global enterprise customers using cloud IaaS will take a multicloud approach. “Multicloud and hybrid approaches are becoming inherent to cloud adoption. Organizations want to take full advantage of best-of-breed solutions, and are therefore working with one or more cloud service providers,” added Nag.

End-user spending on public cloud services in India to grow 25 percent in 2020: Gartner

This double-digit growth will position India as the No. 3 country for end-user spending on public cloud services. 

Gartner
cloud-spending_1.jpg

End-user spending on public cloud services in India is forecast to total $3.4 billion in 2020, a 25% increase from 2019, according to Gartner (see Table 1). This double-digit growth will position India as the No. 3 country for end-user spending on public cloud services. China and Indonesia will be the countries with the highest growth rates in end-user spending on public cloud services in 2020.

“Moving to the cloud and investing in public cloud services have become imperative to the success of digital business initiatives. It’s no longer a question of ‘why’, but a matter of ‘when’ organizations can shift to the cloud,” said Sid Nag, research vice president at Gartner. “We have entered the cloud 2.0 era, where organizations are adopting a cloud-first or a cloud-only strategy.”

Cloud application services (SaaS) remains the segment where end-user organizations in India will spend the most and will represent 42% of overall public cloud services end-user spending in 2020 (see Table 1). End-user spending on SaaS cloud application services in India will total $1.4 billion in 2020, an increase of more than 21% year over year.

Table 1. India: Public Cloud Services End-User Spending Forecast, 2018-2020 (Millions of Dollars)

 Segment

2018

2019

2020

Cloud Application Infrastructure Services (PaaS)

284

363

461

Cloud Application Services (SaaS)

900

1,105

1,364

Cloud Business Process Services (BPaaS)

172

189

212

Cloud Management and Security Services

187

228

274

Cloud System Infrastructure Services (IaaS)

558

744

996

Total Revenue

2,101

2,630

3,307

Note: Due to rounding, figures may not add up precisely to the totals shown.
Source: Gartner (November2019)

Organizations are moving their legacy applications to SaaS because SaaS provides them with the flexibility of subscription-based consumption, in contrast to expensive license-based on-premises consumption models. “SaaS adoption is associated with a lower cost of entry, which is one of the reasons for the high investment in this segment in India, which is a price-sensitive market,” said Nag. 

The next wave of changes that Indian CIOs foresee is consolidation in the cloud services market. “The disinvestment in data centres by small and niche cloud service providers has increased the opportunities for hyperscale vendors, such as Amazon Web Services, Microsoft and Alibaba, to disrupt the cloud infrastructure services market rapidly,” said Nag. 

Market leaders such as Google, Amazon, Microsoft, Alibaba and IBM currently dominate global cloud infrastructure services market, and will retain the lead as the market grows.

Gartner predicts that, by 2021, 90% of global enterprise customers using cloud IaaS will take a multicloud approach. “Multicloud and hybrid approaches are becoming inherent to cloud adoption. Organizations want to take full advantage of best-of-breed solutions, and are therefore working with one or more cloud service providers,” added Nag.