APAC cloud services spending breaks records

APAC cloud services spending breaks records

Cloud services made up over 84 per cent of all APAC IT and business services spending during the quarter.

Credit: Dreamstime

IT and business spending across the Asia Pacific region has surged during the third quarter of 2021, with cloud services rocketing past traditional managed services.

According to research firm Information Services Group (ISG), annual contract value (ACV) for cloud-based as-a-services above US$5 million rose 62 per cent year-on-year and 5 per cent quarter-on-quarter to a record US$3.1 billion.

In fact, cloud services made up over 84 per cent of APAC IT and business services spending during the quarter — the largest percentage out of all regions globally.

Meanwhile, traditional managed services were up 53 per cent year-on-year to US$575 million. However, this is a 40 per cent fall from the second quarter’s US$929 million.

Combined, the total market reached US$3.6 billion for the period, a 60 per cent increase year-on-year, but was down 6 per cent quarter-on-quarter.

Regardless, this quarter was one of the best year-on-year APAC quarterly growth rates since ISG started measuring cloud computing in 2014, the analyst firm's regional leader for APAC, Scott Bertsch, claimed.

“Much of that is attributable to skyrocketing demand for cloud services to support digital transformation,” he said. “Although traditional managed services hit a high mark last quarter coming out of the pandemic, it couldn’t sustain that level of growth for two consecutive quarters.”

Out of the cloud services segment, software-as-a-service (SaaS) was a major standout, jumping 69 per cent year-on-year and 18 per cent quarterly to a record US$407 million.

Infrastructure-as-a-service (IaaS) meanwhile increased 60 per cent year-on-year and 3 per cent quarter-on-quarter to another record of US$ 2.7 billion.

IT outsourcing (ITO) increased 29 per cent year-on-year but declined 51 per cent quarter-on-quarter to US$405 million, while business process outsourcing (BPO) was up 178 per cent over the period for the year and 18 per cent over the quarter to US$170 million.

As such, ISG said it was optimistic about the market in the short- term, with the firm bumping up its end-of-year forecast for both cloud and managed services, from 21 per cent to 25 per cent and 9 per cent to 10.1 per cent, respectively.

Tags Information Services GroupISG

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