Public IT cloud services spending across the world is expected to rise at a compound annual growth rate (CAGR) of 23.5% to cross $107bn in 2017, according to a report from the International Data Corporation (IDC).
According to the report, the spending on IT cloud services is expected to reach $47.4bn in 2013 driven by increase in overall cloud services adoption with the expansion of cloud deployment options.
IDC senior vice president and chief analyst Frank Gens said that the first wave of cloud services adoption was focused on improving the efficiency of the IT department.
"Over the next several years, the primary driver for cloud adoption will shift from economics to innovation as leading-edge companies invest in cloud services as the foundation for new competitive offerings," Gens said.
"The emergence of cloud as the core for new 'business as a service' offerings will accelerate cloud adoption and dramatically raise the cloud model's strategic value beyond CIOs to CXOs of all types."
The analysts anticipate that the growing commoditisation and competition will bring about integration in the basic cloud services and will force vendors to expand their offerings toward higher value services.
Public IT cloud services are expected to drive 17% of IT product spending and about half of all growth across five technology categories including applications, system infrastructure software, platform as a service (PaaS), servers, and basic storage.
The software as a service (SaaS) is expected to be the largest public IT cloud services category during the forecast period contributing 59.7%of revenues, while PaaS and Infrastructure as a service (IaaS) are expected to be the fastest growing segments with anticipated growth of 29.7% and 27.2% respectively.
Regionally, the US is expected to be the largest public IT cloud services market with 43.9% market share in 2017, a decrease compared to the estimated 56.9% share in 2013, while Western Europe, Latin America, and Asia/Pacific are anticipated to increase their shares over the next five years.
The report said that the cloud spending in emerging markets is expected to register CAGR of 37.3% during the forecast period, double the increase compared to developed markets.