Global Public Cloud Services Revenue Up Almost 20 Percent

Worldwide revenue for the public cloud services market totaled $669.2 billion in 2023, an increase of 19.9 percent compared to 2022, according to new data from the International Data Corporation (IDC) Worldwide Semiannual Public Cloud Services Tracker.

(The public cloud is a third-party managed platform that provides computing resources to users over the Internet, such as those provided by Microsoft and Amazon.)

The largest source of public cloud services revenue in 2023 was Software as a Service – Applications (SaaS – Applications), which accounted for nearly 45 percent of the market total. Infrastructure as a Service (IaaS) was the second largest revenue category with 19.9 percent of the total while Platform as a Service (PaaS) and Software as a Service – System Infrastructure Software (SaaS – SIS) delivered 18.4 percent and 17.0 percent of overall revenue respectively. PaaS and SaaS – SIS were the categories with the fastest year-over-year revenue growth.

Worldwide Public Cloud Services Revenue and Year-over-Year Growth, Calendar Year 2023 (revenues in US$ billions)
Deployment Category 2023 Revenue 2023 Market Share 2022 Revenue 2022 Market Share 2023/2022 Growth
IaaS $133.4 19.9% $115.5 20.7% 15.6%
PaaS $123.3 18.4% $95.4 17.1% 29.3%
SaaS – Applications $298.5 44.6% $254.4 45.6% 17.4%
SaaS – System Infrastructure Software $114.0 17.0% $93.1 16.7% 22.5%
Total $669.2 100% $558.3 100% 19.9%
Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H 2023, May 2024.

“In large part due to end-user investment in AI, PaaS revenue growth continues to outpace the overall cloud market,” explained Adam Reeves, research director for PaaS for Developers of Modern and Edge Applications. “Both market share-leading vendors and smaller providers continue to release PaaS-delivered AI offerings. Vendors are focused on being strategic partners to their customers by delivering highly performant, developer-friendly, trustworthy, and secure offerings that help users deliver intelligent applications more efficiently.”

The leading providers of public cloud services maintained their positions in 2023 with the combined revenue of the top-five public cloud service providers – Microsoft, Amazon Web Services, Salesforce Inc., Google, and Oracle – capturing 40.5 percent of the worldwide total. With offerings in all four deployment categories, Microsoft remained in the top position in the overall public cloud services market with 16.8 percent share in 2023, followed by Amazon Web Services with 12.4 percent share.

IDC forecasts worldwide public cloud services revenue will surpass $800 billion in 2024, an increase of 20.5 percent over 2023, with a similar increase expected in 2025. While the annual rate of growth will slow slightly over the forecast period, the market is still forecast to deliver a five-year compound annual growth rate (CAGR) of 19.5 percent, with worldwide revenues reaching $1.6 trillion in 2028.

“The mainstreaming of AI is driving organizations to rethink their infrastructure strategy,” said Dave McCarthy, research vice president, Cloud and Edge Infrastructure Services. “Public cloud IaaS will be an attractive source for AI-ready infrastructure as cloud service providers are heavily investing in the high-performance compute, storage, and networking services needed for AI workloads. The on-demand and pay-as-you-go tenets of cloud infrastructure facilitate access to the latest AI technology without large upfront investments or supply chain delays.”

About the Report

IDC’s Worldwide Semiannual Public Cloud Services Tracker provides total market size and vendor share for more than seventy segments of the global public cloud services market. Measurement for this Tracker is public cloud services revenue, which includes Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service – System Infrastructure Software (SaaS – SIS), and Software as a Service – Applications subscription revenues. The Tracker follows more than 850 cloud services companies across a total of 49 countries globally. Annual five-year market forecasts for this Tracker are updated semiannually. Forecasts are available at the worldwide, regional, and country levels.

For more information about IDC’s Worldwide Semiannual Public Cloud Services Tracker, contact IDC’s Jackie Kliem at jkliem@idc.com.

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