India’s public cloud services market grew to US$3.8 billion in 1H2023

According to the International Data Corporation (IDC) Worldwide Semi-annual Public Cloud Services Tracker, the Indian public cloud services (PCS) market, including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) solutions, and software-as-a-service (SaaS), revenue totalled $3.8 Billion for 1H2023 (January-June). The overall Indian public cloud services market is expected to reach $17.8 billion by 2027, growing at a CAGR of 22.9% for 2022-27.

“Public cloud services in India have evolved beyond just cost savings and flexibility,” says Rajiv Ranjan, Associate Research Director, Cloud and Artificial Intelligence, 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. In the future, GenAI is expected to help more in cloud security and cloud infrastructure management as well. All these investments will drive public cloud services growth in India,” Ranjan ends.

SaaS continued to be the largest component of the overall public cloud services market, followed by IaaS and PaaS in 1H2023. The top two public cloud service providers continue to hold more than 40% of the market.

Despite challenging economic conditions, leading cloud service providers are making significant investments in India. This move signals their confidence in the strong potential of the Indian market.

Traditional segments such as IaaS, collaborative applications, CRM, and ERM continue to drive growth. Simultaneously, service providers also witnessed a surge in demand for offerings around AI and data management, highlighting the evolving needs in cloud service offerings. IDC