The overall India public cloud services market is expected to reach $13.0 billion by 2026, growing at a CAGR of 23.1% for 2021-26 on the back of growing adoption of digital services and 5G rollout, according to research firm IDC (International Data Corporation). The cumulative revenue of India’s public cloud services (PCS) market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS), totalled $2.8 billion in the first half of 2022. SaaS was the largest component of the Indian PCS market, followed by IaaS and PaaS during the first half of 2022, said the report titled ‘IDC Worldwide Semi-annual Public Cloud Services Tracker, H12022 (January-June)’.
There was also a surge in the adoption of cloud-based AI platforms and cloud-native application development. According to the report, cloud service providers are expanding in India by putting up new data centres/cloud regions. Banking, Financial Services and Insurance (BFSI) and manufacturing are among the leaders in public cloud adoption. However, the demand is also growing in other sectors such as state-owned companies, media, and gaming.
Some of the most in-demand public cloud service areas include collaboration applications, computing, storage, customer relationship management, enterprise resource management, and security. There is also a surge in the adoption of cloud-based AI platforms and cloud-native application development, as per IDC said. In terms of vendor market share, the top two public cloud service providers Amazon Web Services (AWS) and Microsoft control more than 45% of the market.
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“With more Indian enterprises working on strengthening their digital and smart capabilities, public cloud adoption will continue to be driven by the demand for upgrading legacy systems, omni-channel customer expenses, real-time data analytics, connected platforms and applications, etc,” said Harish Krishnakumar, senior market analyst, IDC India.
“With the growth in digital innovation, organizations are looking to bring new products and services to the market faster through digital streams and increase their investments in technologies such as AI/ML, edge computing, blockchain, and IoT to improve customer experience and business efficiency,” said Rajiv Ranjan, Associate Research Director, Cloud and Artificial Intelligence, IDC India.
Cloud service providers are expanding their footprint in India and are setting up new data centres/cloud regions to cater to the demand for cloud services in new sectors and regions. IDC analysts attributed the growth to the rising demand for digital services, which has spurred organisations to move applications to the cloud.