The global public cloud services market totalled $233.4 billion (£176 billion) in 2019, representing a 26% increase year-over-year. 

That’s according to a new report from IDC, which reveals that the top five public cloud service providers – Amazon Web Services (AWS), Google, Microsoft, Oracle and Salesforce.com – accounted for more than a third of the worldwide total, growing a combined 35% year over year.

Software as a service (SaaS) remained the largest segment of public cloud spending with revenues of more than $122 billion in 2019, an increase of 20% year-over-year. IDC expects SaaS growth to continue as a result of the COVID-19 pandemic, as businesses shift to subscription-based models and look to software collaboration tools to facilitate remote working. 

“Cloud is expanding far beyond niche e-commerce and online ad-sponsored searches. It underpins all the digital activities that individuals and enterprises depend upon as we navigate and move beyond the pandemic,” says Rick Villars, group vice president, Worldwide Research at IDC. 

“Enterprises talked about cloud journeys of up to ten years. Now they are looking to complete the shift in less than half that time.”

Infrastructure as a service (IaaS) came in second with revenues of $49 billion, up from $35.4 billion in 2018, while platform as a service (PaaS) ranked in third place with revenues of $35.9 billion. 

In the combined IaaS and PaaS market, AWS and Microsoft captured more than half of global revenues.

IDC said it expects spending on IaaS and PaaS to continue growing at a higher rate than the overall cloud market over the next several years as resilience, flexibility, and agility guide IT platform decisions.

“Today’s economic uncertainty draws fresh attention to the core benefits of IaaS – low financial commitment, flexibility to support business agility, and operational resilience,” said Deepak Mohan, research director of Cloud Infrastructure Services at IDC. 

“Cost optimisation and business resilience have emerged as top drivers of IT investment decisions and IaaS offerings are designed to enable both. The COVID-19 disruption has accelerated cloud adoption with both traditional enterprise IT organisations and digital service providers increasing use of IaaS for their technology platforms.”