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Publication date: 29 Aug 2023

Worldwide Spending on Public Cloud Services is Forecast to Reach $1.35 Trillion in 2027, According to New IDC Spending Guide


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NEEDHAM, Mass., August 29, 2023 – Worldwide spending on public cloud services is forecast to reach $1.35 trillion in 2027, according to the latest update to the International Data Corporation (IDC) Worldwide Software and Public Cloud Services Spending Guide. Although annual spending growth is expected to slow slightly over the 2023-2027 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 19.9%.

"Cloud now dominates tech spending across infrastructure, platforms, and applications," said Eileen Smith, program vice president, Data & Analytics at IDC. "Most organizations have adopted the public cloud as a cost-effective platform for hosting enterprise applications and for developing and deploying customer-facing solutions. Looking forward, the cloud model remains incredibly well positioned to serve customer needs for innovation in application development and deployment, including as data, artificial intelligence/machine learning (AI/ML), and edge needs continue to define the forefront of innovation."

Of the 28 industries* covered in the Spending Guide, the three largest in 2027 – Banking, Software and Information Services, and Telecommunications – will together represent $326 billion in public cloud services spending. Retail and Professional and Personal Services will be the next largest industries in terms of spending, giving the top 5 industries a combined share of nearly 36%. The industries that will see the fastest spending growth through 2027 are Software and Information Services (24.0% CAGR), Capital Markets (21.9% CAGR), and Telecommunications (21.8% CAGR). In fact, every industry except Consumer will deliver double-digit CAGRs over the 2023-2027 forecast period.

Software as a Service (SaaS) – Applications will be the largest category of cloud computing, capturing roughly 40% of all public cloud spending. SaaS – Applications will also see the slowest spending growth over the forecast period with a five-year CAGR of 15.8%. The leading SaaS applications will be enterprise resource management (ERM) and customer relationship management (CRM), followed by content workflow and management applications and collaborative applications.

Infrastructure as a Service (IaaS) will be the second largest category of public cloud spending, followed by Platform as a Service (PaaS). PaaS spending will be the fastest growing category with a five-year CAGR of 27.2%, led by purchases of data management software, application platforms, and analytics and business intelligence software. IaaS spending, comprised of compute, storage, and networking devices, will be the second fastest growing category with a CAGR of 23.5%.

SaaS – System Infrastructure Software (SIS) will be the smallest category of cloud spending, representing roughly 15% of the overall market. Security software will be the largest area of investment in this category, rivaling ERM spending in the SaaS applications category. Physical and virtual computing software will see the fastest spending growth among the SIS products.

The United States will be the largest geographic public cloud market with spending forecast to reach $697 billion in 2027. Western Europe will be the second largest market in 2027 with investments totaling $273 billion, followed by China at $117 billion. Latin America will see the fastest spending growth with a five-year CAGR of 29.1%, followed by China with a CAGR of 26.9%.

The Worldwide Software and Public Cloud Services Spending Guide quantifies public cloud services spending by cloud type for 28 industries and five company sizes across nine regions and 53 countries. Unlike any other research in the industry, the comprehensive spending guide was designed to help IT decision makers to clearly understand the industry-specific scope and direction of public cloud services spending today and over the next five years.

* This version of the Spending Guide utilizes IDC's new industry taxonomy, described in the recently published study, IDC's New Industry Framework, Definitions, and Transition Plan (IDC #US51064723). The taxonomy update brings deeper analysis capabilities to market through enhanced visibility into sectors, sub-sectors (sector detail level), and industries, increasing the total number of industries covered from 20 to 28. The expansion was developed in response to customer demand and created by researching existing industry taxonomies, including economic standards, client inquiries, technology vendor target industries, and competitive taxonomies.

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 about IDC's Spending Guides, please contact Eileen Smith at

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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 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, 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, please visit Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.