India’s cloud market is expected to grow at CAGR of around 30% and is estimated to touch over $7 billion in 2022, i.e., 3-times the current market ($2.5 billion in 2018) size according to Cloud – Next Wave of Growth report released by NASSCOM in collaboration with Google Cloud and Deloitte Touche Tohmatsu India.
According to Gartner, the worldwide public cloud services market is projected to grow 17.5 percent in 2019 to total $214.3 billion, up from $182.4 billion in 2018. Globally, the fastest-growing market segment will be infrastructure as a service (IaaS), which is forecast to grow 27.5 percent in 2019 to reach $38.9 billion, up from $30.5 billion in 2018. The second-highest growth rate of 21.8 percent will be achieved by platform as a service (PaaS).
According to IDC, India’s spending on public cloud services and infrastructure is forecasted to reach $2.9 billion in 2019, an increase of 34.5% over 2018. Although annual spending growth is expected to be moderate during forecast period 2017-22, the market is expected to hit a five-year compound annual growth rate (CAGR) of 33.9% in public cloud services spending.
Cloud spending in India is the second highest in the world at 40.2% CAGR over 2016-18, second only to China thanks to its usage by Indian SMEs, enterprises and government.
As per IDC, India’s Infrastructure as a Service (IaaS) spending is estimated at $1 billion in 2018 and is forecasted to grow at 25% per annum to reach $2.3 – 2.4 billion in 2022. India’s Software as a Service (SaaS) market is expected to contribute $3.3 – 3.4 billion by 2022, showing a growth rate of 36% per annum.
SaaS is by far the dominant cloud-delivered service in the region capturing 61.0% of the overall public cloud spending in 2018. IaaS is the second biggest product category in spending on cloud, with a 32.9% share followed by Platform as a service (PaaS) with 6.1% share in 2018.
SaaS spending will be skewed towards Application throughout the forecast with Collaborative Applications, Customer Relationship Management (CRM) Applications and Enterprise Resource Management (ERM) applications as the major contributors towards the spend. IaaS spending will be balanced throughout the forecast with server spending trending ahead of storage spending.
Telecommunication and banking are the two leading industries accounting for 14.7% and 14.5% market share of the overall public cloud spend in 2018. Following this, discrete manufacturing, personal and consumer services and process manufacturing altogether are also expected to spend more than 26% on professional services in 2018.
Cloud spending is on a growth trajectory and is propelled by factors such as: Increased awareness of cloud, consumerization of IT, proliferation of start-up ecosystem, diverse landscape of supplier ecosystem, rising investments in infrastructure, talent, strategic partnerships and the impetus from key digital-led government programs.
“India’s cloud computing market is poised for growth and, the technology is increasingly being embraced across businesses as well as consumers. Complementing the ecosystem are the futuristic technologies such as Artificial Intelligence, Machine Learning, Advanced Analytics and Immersive media that are aiding in the seamless adoption of SaaS, IaaS and PaaS offerings,” said Debjani Ghosh, President, NASSCOM.
“Enterprises in India are realizing the true cloud potential and are including emerging technologies like AI, IoT, Analytics and Blockchain in their portfolio, this anticipated journey towards the value added services are all driven out of the cloud,” Ashutosh Bisht , Senior Research Manager, Customer Insights and Analysis group, IDC said.
Factors that will further strengthen the cloud market in India are: Driving awareness amongst enterprises about cloud technology; Consideration on the impact of data localisation; Strict compliance with data privacy laws; Enforcement of data protection bill; Nurture advanced skill development; Strengthen the internet and power infrastructure; Incentivize MSMEs for cloud adoption; and Enable ease of operations for data centre setup.