Public cloud services spending in the Asia/Pacific region is accelerating, fueled by rapid IT infrastructure modernization and the integration of artificial intelligence (AI) and machine learning (ML). According to the International Data Corporation (IDC) Worldwide Software and Public Cloud Services Spending Guide, public cloud services market in the region is projected to grow at a compound annual growth rate (CAGR) of 19.8% from 2025 to 2029, expanding from $53 billion in 2024 to $131 billion by 2029. This growth is fueled by the increasing adoption of Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) solutions, which are becoming essential for businesses aiming to enhance operational efficiency and drive innovation. Key sectors such as government, healthcare, and banking are leading the charge in IT infrastructure modernization, further accelerating cloud adoption across the region.
The region’s shift toward cloud-first strategies is reshaping business priorities, aligning technology investments with broader organizational objectives. As cloud becomes central to business transformation, enterprises are prioritizing security, uptime and resiliency in their cloud investments. The integration of AI into cloud platforms is adding complexity, prompting organizations to rely on managed service providers and cloud vendors for specialized services. SaaS applications are expected to double in market size during the forecast period, leveraging cutting-edge AI advancements to enhance personalization, customer experience and operational efficiency. Additionally, the partner ecosystem is playing a pivotal role in enabling seamless cloud transformations, with vendors focusing on industry-specific use cases and ROI-driven solutions to meet diverse customer needs.
“While challenges like legacy system migration and skills shortages remain, the strong growth trajectory of the Asia/Pacific public cloud market highlights the region’s commitment to cloud-native technologies and data modernization,“ says Mario Allen Clement, research manager, Data and Analytics. “We‘re seeing particularly strong momentum in industries like financial services, retail and telecommunications, where cloud is becoming a foundational element for operations. The accelerating demand for IaaS, PaaS and SaaS, coupled with strategic investments in sovereign cloud solutions, positions Asia Pacific as a pivotal force in the global cloud landscape for years to come.”
Telecommunications and financial services are leading public cloud adoption in Asia/Pacific, driven by network modernization and the rapid shift to digital banking. Sectors such as retail, business and personal services, along with government, are also seeing robust growth, driven by e-commerce expansion, operational efficiencies, coupled with e-governance initiatives in many countries within the region. Industries like durable goods and healthcare might be more sensitive to these cost increases, given their potentially tighter margins or slower adoption curves.
In this environment, any new tariffs on imported technology, such as servers, networking equipment, or other hardware components critical for building cloud data centers, could have a multifaceted impact. While such tariffs might increase the initial capital expenditure for cloud providers and enterprises, potentially slowing the pace of cloud adoption in the short term, they could also spur a greater shift towards consuming cloud services from existing providers rather than building in-house infrastructure. This scenario would disproportionately benefit major cloud providers who have already established their data center presence.
While the Asia/Pacific region is set for strong public cloud growth, challenges such as legacy system migration and talent shortages remain key barriers. To address these, enterprises are adopting hybrid and multi-cloud strategies that enable flexible application migration and interoperability. Markets like Australia, India and Singapore are seeing strong momentum, supported by investments in sovereign cloud and data residency mandates. However, macroeconomic pressures such as inflation and geopolitical tensions are affecting short-term spending. Despite this, the region’s focus on cloud-native technologies and data modernization is expected to drive sustained long-term growth and solidify its position in the global cloud market.
About IDC’s Worldwide Public Cloud Services Spending Guide
The IDC Worldwide Software and Public Cloud Services Spending Guide quantifies public cloud computing purchases by cloud type for 28 industries and 8 company sizes across 53 countries. This comprehensive spending guide was designed to help IT decision makers clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years. The spending guides are delivered via pivot table format or custom query tool, allowing the user to easily extract meaningful information about each market by viewing data trends and relationships.
The 28 industries included in the IDC’s new industry taxonomy are: Consumer; Banking; Insurance; Capital Markets; Healthcare Payer; Healthcare Provider; Life Sciences; Telecommunications; Oil and Gas; Utilities; High Tech and Electronics; Aerospace and Defense; Automotive; Industrial and Other Manufacturing; Chemicals; Consumer Goods; Agriculture and Fishing; Mining; Retail; Software and Information Services; Travel and Transportation; Hospitality and Leisure; Media and Entertainment; Engineering, Construction, and Real Estate; Professional and Personal Services; Education; Federal/Central Government; State/Local Government.
*Asia/Pacific excluding Japan and China
