Worldwide spending on public cloud services reached $545.8 billion in 2022, new data from IDC says. Global revenue generated by public cloud services topped the $500 billion mark in 2022, according to new data released this week by research firm IDC. The actual figure was $545.8 billion, IDC’s research found, a sum that represents a 22.9% increase over the previous year. Foundational cloud services — which IDC defines as infrastructure, platform and system infrastructure software delivered as services — grew even more quickly, rising by 28.8% in year-on-year terms. This foundational spending, according to IDC, reflects the growing dependence organizations have on data and AI services, distributed computing and app frameworks. Spending on IaaS and PaaS, in particular, should continue to grow more quickly than the overall public cloud market, which cloud providers have reacted to by deploying increasingly high-performance infrastructure. “This serves two purposes,” said IDC research vice president Dave McCarthy in the report. “First, it unlocks the next wave of migration for enterprise applications that have previously remained on-premises. Second, it creates the foundation for new AI software that can be quickly deployed at scale. In both cases, these investments are resulting in market growth opportunities.” IDC’s data also show a continuing consolidation in the public cloud market. Although the top five public cloud services providers account for less than half of the marketplace, their revenue grew faster than the market at large, at 27.3% last year. Microsoft is the largest public cloud provider in the world, according to IDC’s information, accounting for 16.8% of the overall market, followed closely by AWS, at 13.5%. (Salesforce, Google and Oracle rounded out the top five.) One of the chief drivers of new public cloud spending will be generative AI, IDC’s researchers said. AI capabilities are likely to be a central consideration for most organizations in the immediate future, and the importance of public cloud to any potential AI offering cannot be overstated. “IDC research shows that most organizations rank their public cloud provider as their most strategic technology partner,” said research director Lara Greden, in the IDC report. “When it comes to planning for PaaS developer and data services, organizations that haven’t yet begun their journeys in developing AI-enabled applications are beginning to prioritize them. Those that have started to adopt AI are finding themselves well positioned to evaluate further adoption of generative AI capabilities in an intelligent app-strategy.” The single largest area of spending in 2022, according to IDC, was SaaS applications, clocking in at $246.3 billion in revenue, followed by IaaS at $115.5 billion. Related content feature Windows 11 Insider Previews: What’s in the latest build? Get the latest info on new preview builds of Windows 11 as they roll out to Windows Insiders. Now updated for Build 26217 for the Canary Channel, released on May 15, 2024. By Preston Gralla May 15, 2024 256 mins Small and Medium Business Microsoft Windows 11 news Senators propose $32B on AI spending without firm regulatory oversight After months of meetings with industry experts and AI critics, a group of four US senators published what they say is a comprehensive roadmap for maintaining US leadership in AI development. By Lucas Mearian May 15, 2024 4 mins Regulation Government Generative AI news Meta signals the end of the road for Workplace The enterprise social network was used by millions of workers, but a shift in Meta’s priorities means the app will be phased out over the next two years. By Matthew Finnegan May 15, 2024 3 mins Facebook Collaboration Software Productivity Software news analysis There aren't nearly enough workers to support new US chip production Even as the semiconductor industry hopes to find and recruit skilled workers, a lack of talent could undermine national objectives, push up labor costs, and hinder the returns from the billions of dollars being spent, according to a McKinsey & Co By Lucas Mearian May 15, 2024 10 mins CPUs and Processors Government Manufacturing Industry Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe