Digital innovation accelerates India’s public cloud adoption, says IDC

India's public cloud services market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), revenue totalled $4.6 billion for 2021 (from July to December), said research firm International Data Corporation (IDC). The overall Indian public cloud services market is expected to reach $13.5 billion by 2026, growing at a CAGR of 24% for 2021-26, it said.

India continues to be among the fastest-growing market for public cloud service providers due to the robust demand from large enterprises, digital natives, and from small and medium businesses in the country, said IDC adding that all of them are looking for innovations. It further said that in 2021, enterprises continued to invest in public cloud to ensure business continuity, improve resilience and productivity, and drive digital innovation.

"With digital innovation leading the top business objectives for Indian organisations, cloud adoption is set to accelerate this year,” said Rishu Sharma, Associate Research Director, Cloud and Artificial Intelligence, IDC India.

SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS in 2021. The public cloud spending continued to increase among enterprises, said the study, with top two service providers — Amazon Web Services (AWS) and Microsoft (Azure) — holding more than 45% of the market.

The report showed that there has been an increased demand for cloud-based security applications as organisations expect part of their hybrid workforce to return to offices in 2022.

The increased spend is expected to continue in the upcoming years as enterprises invest in emerging technologies like AI/ML, IoT, edge computing, blockchain, etc., to automate processes and drive innovation with public cloud as the foundation, said the report.

A November 2021 report by research firm Gartner also echoed similar views. It said that driven by increased digital innovation, India's end-user spending on public cloud services is forecast to total $7.3 billion in 2022, an increase of 29.6% from 2021.

Sid Nag, research vice president at Gartner, commented that while the “pandemic was a tipping point for Indian businesses to realise the true value of public cloud, the growth will continue to be driven by organisations looking to modernise their information technology and reduce their capital expenditure spend.

The researchers believe that India’s policy infrastructure is also emerging as an important contributor to public cloud growth. Initiatives aimed at building a skilled cloud workforce in collaboration with private IT service providers, such as the Meghraj and Cloud Vision for India 2022 will further strengthen the public cloud ecosystem in the country.