According to a report by the International Data Corporation (IDC), India’s public cloud services market is expected to reach $17.8 billion by 2027, growing at a CAGR of 23.4 per cent during 2022-27. The total revenue for the public cloud services market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), stood at $6.2 billion in 2022. SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS in 2022, with the top two cloud service providers holding more than 40 per cent share of the Indian public cloud services market.
As per the report, despite global macroeconomic headwinds intensifying in the second half of 2022, the industry witnessed robust growth, driven by the accelerating digital transformation among Indian enterprises, and cloud service providers continuing to witness increased demand from small and medium businesses (SMBs) and startups. Enterprises increasingly availed compute and storage services as part of their IT infrastructure modernisation initiatives, and there was also an increased demand for cloud-based collaborative applications, environmental resources management (ERM), customer relationship management (CRM), and security software. Demand for public cloud services was also driven by accelerated artificial intelligence (AI) adoption, with enterprises increasing investments in cloud-based AI platforms.
Commenting on the findings, Rajiv Ranjan, associate research director, Cloud and AI, IDC India, said, “Post the COVID period, the pace of digital transformation has been steady in India as organisations are driving innovation, introducing digital products and services, and automating processes. Improving customer experience has been the top priorities for enterprises in India. Migrating from legacy infrastructure to cloud has been the most preferred way to modernise IT infrastructure which is driving public cloud services growth. In the next coming years, we can also expect growing adoption of AI technologies, containerised applications, edge computing, serverless computing, and kubernetes technologies to further enhance efficiency and agility of infrastructure and applications on cloud.”
Meanwhile, Harish Krishnakumar, senior market analyst, IDC India, said, “The accelerated digital adoption among Indian enterprises with cloud as a key enabler continued to be the prime driver of the public cloud services market in India, as cloud adoption helps enterprises drive efficiency in operations along with scalability benefits, thereby enabling them to gain a competitive advantage. The surge in public cloud adoption is expected to continue in the upcoming years, with more enterprises focusing on digital-first business strategies, with the adoption of technologies like AI/machine learning (ML), analytics, etc., and cloud-native application development also gaining momentum. Enterprises would have a strong inclination towards as-a-service consumption models for their IT infrastructure requirements as a measure to keep IT spending in check amidst the challenging economic landscape and also mitigate talent shortages in ITOps.”