The COVID-19 pandemic has accelerated digital transformation efforts in India
According to the International Data Corporation (IDC), the India public cloud services (PCS) market, which includes infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) solutions, generated a revenue of $US6.2 billion in 2022. The market is projected to reach $US17.8 billion by 2027, exhibiting a compound annual growth rate (CAGR) of 23.4 per cent for the period of 2022-2027.
The COVID-19 pandemic has accelerated digital transformation efforts in India, with organizations focusing on innovation, digital product and service offerings, and process automation. Enhancing customer experience has been a top priority for enterprises, leading to a preference for migrating from legacy infrastructure to the cloud, driving the growth of public cloud services. In the coming years, the adoption of AI technologies, containerized applications, edge computing, serverless computing, and Kubernetes technologies is expected to further improve the efficiency and agility of infrastructure and applications on the cloud.
Among the components of the public cloud services market, SaaS maintained its position as the largest segment, followed by IaaS and PaaS in 2022. The top two cloud service providers held over 40 per cent of the India public cloud services market.
Despite global economic challenges, the India Public Cloud Services Market experienced strong growth in the second half of 2022. This growth was driven by the increasing digital transformation efforts among Indian enterprises, as well as growing demand from small and medium-sized businesses (SMBs) and start-ups. Enterprises focused on modernizing their IT infrastructure, leading to increased adoption of compute and storage services. There was also a rise in demand for cloud-based collaborative applications, enterprise resource planning (ERP) and customer relationship management (CRM) software, and security solutions. The adoption of cloud-based AI platforms also contributed to the demand for public cloud services.
The digital adoption by Indian enterprises, with cloud as a key enabler, remained the primary driver of the public cloud services market. Cloud adoption enables enterprises to drive operational efficiency and scalability, gaining a competitive advantage. The momentum of public cloud adoption is expected to continue, with enterprises prioritizing digital-first business strategies and adopting technologies like AI/ML, analytics, and cloud-native application development. As-a-service consumption models are likely to be preferred for IT infrastructure requirements to control IT spending and address talent shortages in IT operations.
