Worldwide spending on public cloud services will grow 20.7% in 2023, to $591.8 billion, according to a new Gartner Inc. forecast released today.

The research firm also released its spending projection for 2022. Gartner expects organizations to spend $490.3 billion on cloud services this year, a 18.8% increase from the $412.6 billion invested during 2021. The fact that the market’s growth rate is projected to accelerate from 18.8% this year to 20.7% in 2023 reflects increasing enterprise demand across several cloud service categories. 

“Current inflationary pressures and macroeconomic conditions are having a push and pull effect on cloud spending,” said Gartner Vice President Analyst Sid Nag. “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.”

Gartner’s forecast organizes the cloud service market into six major segments. The segment expected to grow at the fastest rate in 2023 is the infrastructure-as-a-service category. According to Gartner’s estimate, IaaS spending will increase by at least 29.8% next year, to $150.2 billion.

“Cloud migration is not stopping,” Nag said. “IaaS will naturally continue to grow as businesses accelerate IT modernization initiatives to minimize risk and optimize costs. Moving operations to the cloud also reduces capital expenditures by extending cash outlays over a subscription term, a key benefit in an environment where cash may be critical to maintain operations.”

The platform-as-a-service and software-as-a-service segments are expected to grow 23.2% and 16.8%, respectively. PaaS spending is on track to increase from $110.6 billion this year to $136.4 billion in 2023. During the same time frame, SaaS budgets will grow from a cumulative $146.3 billion to more than $195.2 billion.

Gartner’s forecast for the cloud service market also encompasses three other segments. They are the desktop-as-a-service, cloud management and security services and business process as a service segments.

Desktop-as-a-service is the umbrella term for platforms that a company can use to provide its employees with cloud-based workstations. Such workstations are easier to manage than traditional personal computers. According to Gartner, DaaS spending will reach $2.53 billion this year and $3.1 billion in 2023.

The cloud management and security category in Gartner’s market forecast encompasses products that make it easier for companies to maintain and secure the cloud offerings they purchase. The research firm expects spending in this area to reach $41.6 billion next year, up from $34.1 billion during 2022.

The sixth major focus area of Gartner’s forecast is the business process as a service, or BPaaS, category. The category encompasses cloud-based business process outsourcing offerings, which are services that assist organizations with tasks such as application maintenance. Gartner’s forecast projects that the BPaaS segment will grow to $60.1 billion this year and $65.1 billion in 2023.

The cloud services market is on track to grow at a significantly faster pace in 2023 than overall information technology spending. Gartner expects that worldwide IT spending will climb 5.1% year-over-year in 2023, to $4.6 trillion.

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