IaaS investment on the rise as Asia embraces cloud

IaaS expected to become fastest-growing market segment until 2024

Customer spending on infrastructure-as-a-service (IaaS) is projected to increase at a compound annual growth rate of 11.2 per cent until 2024 across Asia Pacific, resulting in regional spending nudging the $40 billion mark.

According to GlobalData findings, Asia Pacific represents a “vibrant market” for IaaS adoption, triggered by growing demand for the cloud infrastructure services at enterprise level.

As a result, IaaS is expected to become the fastest-growing cloud market segment during the next five years, having previously accounted for approximately 21 per cent of total cloud revenue in 2019 across Asia Pacific. Specifically, China, Japan, India, Australia and South Korea are set to become the five largest IaaS markets within the region, together accounting for more than 80 per cent of the overall market share by 2024.

“Increased government spending to modernise the existing IT infrastructure and growing shift towards server virtualisation are the major factors likely to boost the growth of the IaaS market in the region,” said Anshuma Singh, technology analyst at GlobalData.

Credit: GlobalData

Singh said government initiatives are also expected to propel the development of the cloud services market in the region "either directly or indirectly" in line with other digitalisation initiatives such as the ‘Digital India’ campaign in India and the ‘Cloud-First Strategy’ in Malaysia.

“IaaS vendors are also focusing on strategic partnerships with the local and global telecom service providers to expand their presence in the region,” explained Singh, citing the introduction of Amazon Web Services (AWS) Wavelength for telecom operators.

Meanwhile, leading telcos such as Vodafone, KDDI, SK Telecom and Verizon have partnered with AWS to develop edge computing services on 5G networks across Europe, Japan and South Korea. In 2019, Alibaba Cloud partnered with ZNet Technologies - an India-based cloud service distributor - to strengthen its presence across the country.

“Maintaining and owning a data centre is expensive and complicated,” Singh added. “Against this backdrop, IaaS has emerged as a universal technology in the cloud environment. This will encourage businesses to implement cloud infrastructure services within their premise to reduce operating costs and enhance productivity.”