Indian public cloud services market to reach $13 billion by 2026

SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS during the first half of 2022.

Published - December 14, 2022 04:25 pm IST

Cloud service providers continued to expand their presence in India

Cloud service providers continued to expand their presence in India | Photo Credit: STL

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, according to research firm IDC. The revenue totalled $2.8 billion for the first half of 2022.

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“Public cloud services continue to grow in India as there is a surge in digital services and organizations have realized the power of the cloud to help them transform digitally,” Rajiv Ranjan, Associate Research Director, Cloud and Artificial Intelligence, IDC India.

With the growth in digital innovation, organisations are looking to increase their investments in technologies like AI/ML, edge computing, blockchain, and IoT to improve customer experience and business efficiency, he added.

The India public cloud services (PCS) market includes infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS).

SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS during the first half of 2022, according to IDC estimates.

“The SaaS market in India has expanded at a blistering pace and this is expected to continue,” Amit Maheshwari, founder and MD, Softlink Global Pvt. Ltd., a SaaS company said to The Hindu.

All studies agree on the fact that MSMEs will be a major contributor to the growth and use of SaaS in India, he added.

With India being a key growth market, cloud service providers continued to expand their presence in the country by unveiling new data centers/cloud regions, to enhance their service delivery capabilities. 

With verticals like BFSI, and manufacturing leading the public cloud adoption, service providers also witnessed increased demand from other verticals like the public sector, media, and gaming.

Some of the most demanded public cloud service areas include collaboration applications, computing, storage, customer relationship management, enterprise resource management, and security. There was also a surge in the adoption of cloud-based AI platforms and cloud-native application development, IDC said.

With more Indian enterprises working to strengthen their digital capabilities, public cloud adoption will continue to be driven by the demand for upgrading legacy systems, omnichannel customer expenses, real-time data analytics, connected platforms, and applications. 

The recent launch of 5G services is expected to open up several opportunities for enterprises undergoing digital transformation, said Harish Krishnakumar, Senior Market Analyst, IDC India.

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