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Public cloud services revenue in India to grow 24% in 2019: Gartner

Cloud application services (SaaS) is set to be the fastest-growing market segment in India in 2019.

ET Bureau|
Updated: Jun 18, 2019, 06.05 PM IST
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The Gartner CIO Agenda survey found that 34% of CIOs in India are expected to increase their spending on cloud services in 2019.
Public cloud services revenue in India is projected to total $2.4 billion in 2019, an increase of 24.3% from 2018, according to Gartner, Inc. Even though India revenue will represent only 1.2% of the global public cloud services total in 2019, it ranks among the nine countries whose growth rate will be higher than the global average growth rate (16%). India is also on pace to record the third-highest growth rate in 2019 after China (33%) and Indonesia (29%).

“The shift from ‘cloud first’ to a ‘cloud only’ model is pushing organizations in India to increase their spending on public cloud services to advance their digital business initiatives,” said Sid Nag, research vice president at Gartner. “Disinvestments in new data centers are also one of the early signs of this move.”

Cloud application services (SaaS) is set to be the fastest-growing market segment in India in 2019, accounting for nearly half of total public cloud services revenue, followed by cloud system infrastructure services (IaaS). SaaS revenue is estimated to grow 23% in 2019 to reach $1.15 billion while IaaS spending is estimated to grow 22% in 2019.

The growth of SaaS spending is being fuelled by the increased end-user spending on customer relationship management (CRM) as organizations in India move away from commercial off-the-shelf (COTS) and license-based on-premises software to a subscription-based SaaS model to gain agility, innovation and cost efficiency.

The Gartner CIO Agenda survey found that 34% of CIOs in India are expected to increase their spending on cloud services in 2019. “Organizations want to reduce capital expenditure spend by consolidating existing data centers and halting the buildout of new ones,” said Nag.

Table 1. India Public Cloud Services Revenue Forecast, 2018-2020 (Millions of U.S. Dollars)
Segment 2018 2019 2020
Cloud application infrastructure services (PaaS) 204 251 313
Cloud application services (SaaS) 935 1149 1396
Cloud business process services (BPaaS) 178 213 261
Cloud management and security services 187 224 269
Cloud system infrastructure services (IaaS) 462 605 809
Total revenue 1965 2442 3048
Note: Totals may not add up due to rounding.

Source: Gartner (June 2019)

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