According to a report by International Data Corporation (IDC), the Indian public cloud services market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), revenue totalled $3.8 billion for H1 2023. The overall Indian public cloud services market is expected to reach $17.8 billion by 2027, growing at a compound annual growth rate (CAGR) of 22.9 per cent for 2022-27.
As per the report, SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS in H1 2023. The top two public cloud service providers continue to hold more than 40 per cent of the market. Traditional segments such as IaaS, collaborative applications, customer relationship management (CRM), and enterprise risk management (ERM) continue to drive growth. Simultaneously, service providers also witnessed a surge in demand for offerings around artificial intelligence (AI) and data management, highlighting the evolving needs in cloud service offerings.
Commenting on the report, Rajiv Ranjan, associate research director, cloud and AI, IDC India, said, “Public cloud services in India have evolved beyond just cost savings and flexibility. Enterprises are increasingly investing in modernising applications, developing cloud-native solutions, and exploring artificial intelligence. While enterprises are ramping up investments in generative AI (GenAI), chatbots, and conversational AI tools, GenAI tools are specifically used for cost optimisation, application development, and workload testing use cases. In the future, GenAI is expected to help more in cloud security and cloud infrastructure management as well. All these investments will drive public cloud services growth in India.”
Meanwhile, Harish Krishnakumar, senior market analyst, enterprise IT services and cloud, IDC India, said, “Enterprises are increasingly relying on public cloud services as they drive digital transformation, and seek agility and operational efficiency. A growing emphasis on cost optimisation continues to accelerate the shift to an ‘as a service’ consumption model, driving the demand for cloud infrastructure services. Public cloud services are expected to have robust demand in the upcoming years as GenAI gains traction, and enterprises focus on implementing workloads that leverage next-gen technologies, while migrating their existing workloads over to a cloud environment.”
The report states that despite challenging economic conditions, leading cloud service providers are making significant investments in India. This move signals their confidence in the strong potential of the Indian market.
