In its latest Worldwide Software and Public Cloud Services Spending Guide, IDC predicts that global spending on public cloud services will soar to $219.3 billion by 2027, with an additional 30% allocated to on-premises and other investments.
The Asia/Pacific region is at the forefront of this IT spending surge, with investments in public cloud services and software expected to grow at a compound annual growth rate (CAGR) of 14.2% over the next five years. This robust growth trajectory indicates the region’s commitment to digital transformation and technological innovation, even amid global economic uncertainties.
Businesses are increasingly adopting cloud environments for their agility, scalability, and cost-efficiency. They are investing heavily in cloud-based software, data analytics tools, and AI platforms to optimize operations, improve customer experiences, and gain valuable insights.
By strategically investing in public cloud and software solutions, businesses are weathering economic uncertainties and positioning themselves for future success in an increasingly competitive landscape.
On the other side, even as the popularity of cloud is rising in Asia/Pacific, some businesses remain hesitant due to data security, network limitations, lack of internal expertise, desire for control, and upfront costs. Cloud providers are countering these concerns by boosting security, improving network infrastructure, offering training and support, providing hybrid/multi-cloud options, and implementing flexible pricing models. This focus on addressing specific needs will likely continue to drive cloud adoption across the region, despite the persistence of on-premises technology preferences.
IDC identifies several key industries fueling this growth, collectively accounting for 60% of the total market:
- Software and Information Services: Growing demand for digital transformation, data analytics, cloud computing, and government support for innovation.
- Banking: Increasing digital banking adoption, rising disposable income, and investments in fintech.
- Telecommunications: Expanding use of mobile data, deployment of 5G networks, and demand for cloud-based communication solutions.
- Industrial and Manufacturing: Increasing automation, adoption of Industry 4.0, demand from domestic markets, and government initiatives promoting manufacturing.
- Government: Investments in e-government services, digital infrastructure, and cybersecurity solutions.
- Retail: Rise of e-commerce, omni-channel retailing, mobile shopping, and increasing disposable income.
- High Tech and Electronics: Growing demand for consumer electronics, smartphones, investments in semiconductor manufacturing.
- Education: Increasing demand for online education, EdTech adoption, government initiatives promoting digital learning.
- Automotive: Increased adoption of electric vehicles (EVs), government incentives for EVs, and rising disposable income.
While challenges such as affordability and infrastructure gaps persist, the Asia/Pacific region is rapidly embracing cloud technologies. This strategic shift, driven by diverse industry needs and supported by both governments and service providers, positions the region for sustainable growth and a competitive edge in the global digital economy.
Source: IDC
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