Good News for the Canadian Public Cloud Market
2020 was a challenging year for the economy due to the induced COVID-19 restrictions. Many businesses were forced to move their entire workforce to work remotely within days. And in turn, software stayed at the forefront, helping and enabling business continuity from the challenges brought by the pandemic. Many software vendors went as far as offering free applications during the second quarter to support other organizations during the crisis.
Cloud penetration in Canada was about 29% in 2018 but is now estimated to reach 37% by the end of 2020. Some markets had a stronger positive impact compared to others, in particular, IDC saw growth in collaboration, document sharing, e-signatures, security, contactless payments, and systems management to support the new remote working ecosystem. While spend towards on-premise markets decreased, it created opportunities for cloud software vendors, with many customers now preparing for the “next normal” with cost optimization, business resiliency, and targeted investments.
Source: IDC Semiannual Software Forecast, Nov 2020
Data residency and cloud migration overall was a major concern for IT buyers a few years ago, but thankfully mega-vendors have opened many cloud regions within Canada in the last few years to support the increasing demand for compute, storage, and adoption of public cloud services. For additional insights on how organizations cloud strategy has changes due to COVID-19, please read IDC's recently published IDC Spotlight, How Will Cloud Strategies Shift Due to COVID-19 in Canada? (CA46924820).
Impact of COVID-19 on IT Spending Budgets
More than 50% of the respondents of our recent IDC’s COVID-19 impact on IT Spending, July 2020 survey highlighted that their organization’s public cloud spending plan will continue or moderately increase, however about 25% of the respondents said that their public cloud spending plans decreased more than 10% from what was planned for 2020.
Source: IDC Canada
Collaborative applications have had a strong positive impact with the majority of the employees working from home since March 2020. Cloud-based applications and security software also had positive growth from the current scenario. For additional information, please read Impact of COVID-19: Canadian Software as a Service Market (CA46166620).
Source: IDC Canada
Public Cloud Services Market Estimated to grow by 20% in 2020 and 16% in 2021
The growth in the public cloud services market is largely driven by the counter-cyclical markets. IDC Canada estimates the public cloud services market (comprising SaaS, PaaS & IaaS markets) to be about C$8 Billion for 2020 and forecast to grow at 15% CAGR by 2024.
Source: IDC Public Cloud Services Forecast, Nov 2020