01 Jul 2020

Public Cloud Spending in CEE Remains Strong for 2020, with Public Sector Spearheading Growth, According to IDC Spending Guide

FOR IMMEDIATE RELEASE, Prague — Despite the impact of COVID-19, public cloud spending in Central and Eastern Europe (CEE) as a region is showing year-on-year growth in 2020 of 18.6% to reach $868.27 million, according to the latest edition of the Worldwide Semiannual Public Cloud Services Spending Guide published by International Data Corporation (IDC). This compares unfavorably to projected (pre-COVID-19) growth of 21.9%, although the spending decrease is far less pronounced than in other technology segments.

Poland and Romania are expected to have the highest growth rates, while Russia, which is the largest individual country market, is going to post the second-lowest year-on-year growth at 15.9%, but it will have a strong recovery in 2021, with a growth rate of 19.2%. With the lowest growth, the Czech Republic is expected to trail the overall public cloud services market, with recovery not expected before 2022.

In general, public cloud services will see growth across the CEE region, as businesses and governments rely on these services for continued operation.

In terms of spending by industry vertical, the public sector (comprising government, healthcare providers, and education) is expected to lead, representing just below 28% of total spending. This is indicative of vast government interventions with regards to public cloud spending, which has been focused on intensified of digital transformation efforts and eservices during the COVID-19 outbreak.

“Measures to combat COVID-19 that require social distancing have pressured public sector organizations to accelerate existing plans to roll out and expand government to citizen (G2C) services, or to develop them quickly, if no plans were in place to do so. This has resulted in a surge in public cloud adoption in the public sector,” says Vladimir Živadinović, senior analyst at IDC Serbia.

Source: IDC Worldwide Semiannual Public Cloud Services Spending Guide, June 2020

The finance sector is also showing robust growth in public cloud spending, at 20.8%, which is in contrast to on-premise spending, which is declining, suggesting a shift in budget models from CAPEX to OPEX. In the banking sector, spending on SaaS system infrastructure software has increased, as the result of accommodating remote work.

In terms of public cloud deployments, SaaS spending still dominates in 2020 with 65.8% of the market share, followed by IaaS at 21.5% and PaaS at 12.7%. However, PaaS is recording the fastest year-on-year growth rate at 29.9%, with a five-year compound annual growth rate (CAGR) of 24.1% projected. This growth is strongly linked to deployments of containerized software on platforms such as Docker, which allow greater portability, streamlined deployment processes, and lower resource consumption compared to traditional virtualized deployments.

Growth rates for public cloud spending are expected to level off as companies undergo cost optimization leading up to the "new normal." Large organizations are expected to maintain spending, due to greater disposable resources digital transformation, which will be necessary to remain competitive in the post-COVID-19 environment.

Israel has been hit particularly hard by COVID-19, with public cloud spending dropping from 30% in 2019 to only 8.8% in 2020.

The IDC Worldwide Semiannual Public Cloud Services Spending Guide is one of IDC's flagship all-in-one data product capturing IT spending across more than 100 technology categories and 53 countries. This IDC Spending Guide will provide a granular view of the market for IT spending from a country, industry, company size, and technology perspective. This comprehensive database delivered via pivot table format or IDC's custom query tool allows the user to easily extract meaningful information about various technology markets and industries by viewing data trends, relationships, and making data comparisons across more than 3 million data points.

About IDC Spending Guides

IDC's Spending Guides provide a granular view of key technology markets from a regional, vertical industry, use case, buyer, and technology perspective. 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. For more information, contact Monika Kumar at mkumar@idc.com.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary of International Data Group (IDG), the world's leading tech media, data and marketing services company. To learn more about IDC, visit www.idc.com. Follow IDC on Twitter at @IDC  and LinkedIn. Subscribe to the IDC Blog for industry news and insights: http://bit.ly/IDCBlog_Subscribe.


Regions Covered

Central and Eastern Europe