Public cloud outlay set to surge next year

Public cloud outlay set to surge next year

Public cloud outlay set to surge next year
IaaS is forecast to experience the highest end-user spending growth in 2023 at 29.8% globally.

Despite the prospect of economic challenges, spending on public cloud services in Thailand is expected to surge 31.8% in 2023, above the global growth rate of 20.7% predicted next year, according to research firm Gartner.

The outlay on public cloud services by end-users in Thailand is forecast to reach 54.4 billion baht in 2023, up from 41.3 billion baht in 2022.

Spending on infrastructure as a service (IaaS) is the category of cloud services forecast to see the highest end-user spending growth in Thailand in 2023 at 41.9%, Gartner said.

All segments are expected to see double-digit growth in 2023.

The rise of cloud usage comes as various global cloud providers are pursuing their infrastructure investment in Thailand, including Alibaba Cloud, Google Cloud and Amazon Web Services (AWS).

Meanwhile, Tencent Cloud and Huawei Cloud have already established data centres in the country.

"Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending," said Sid Nag, vice-president analyst of Gartner.

"Cloud computing will continue to be a bastion of safety and innovation, supporting growth during uncertain times due to its agile, elastic and scalable nature."

According to him, cloud spending could decline if overall IT budgets shrink, given that cloud continues to be the largest chunk of IT spend and proportionate budget growth.

At the global level, end-user spending on public cloud services is forecast to reach US$591.8 billion in 2023, up 20.7% from $490.3 billion in 2022.

This is higher than the 18.8% growth forecast for 2022.

IaaS is forecast to experience the highest end-user spending growth in 2023 at 29.8% globally.

"Cloud migration is not stopping," said Mr Nag. "IaaS will naturally continue to grow as businesses accelerate IT modernisation initiatives to minimise risk and optimise costs."

Moving operations to the cloud also reduces capital expenditure by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations, he said.

Platform as a service (PaaS) and software as a service (SaaS) could see the most significant impacts from inflation due to staffing challenges and the focus on margin protection, but they are still expected to grow 23.2% and 16.8%, respectively, next year.

"Higher wages and more skilled staff are required to develop modern SaaS applications, so organisations will be challenged as hiring is reduced to control costs," said Mr Nag.

"But since PaaS can facilitate more efficient and automated code generation for SaaS applications, the rate of PaaS consumption will consequently increase," he added.

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