India's Public Cloud Services Market to Hit $17.8 Billion by 2027

The Indian Public Cloud services market is projected to achieve a value of $17.8 billion by 2027, with a compound annual growth rate (CAGR) of 22.9% anticipated for the period 2022-2027. The International Data Corporation (IDC) reports that the revenue from Indian public cloud services (PCS), encompassing infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), reached $3.8 billion in the first half of 2023.

"Public cloud services in India have evolved beyond just cost savings and flexibility", says Rajiv Ranjan, Associate Research Director, Cloud and AI, IDC India. Enterprises are increasingly investing in modernizing applications, developing cloud-native solutions, and exploring artificial intelligence.

"While enterprises are ramping up investments in GenAI, chatbots, and conversational AI tools, GenAI tools are specifically used for cost optimization, application development, and workload testing use cases", said Ranjan.

In the first half of 2023, Software-as-a-Service (SaaS) maintained its position as the dominant segment in the overall public cloud services market, with Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) following suit. The market is notably concentrated, with the top two public cloud service providers maintaining a share exceeding 40 percent. Despite economic challenges, major cloud service providers are actively investing in India, underscoring their belief in the robust potential of the Indian market.

"Enterprises are increasingly relying on public cloud services as they drive digital transformation and seek agility and operational efficiency". says Harish Krishnakumar, Senior Market Analyst, Enterprise IT Services & Cloud, IDC India.