IT industry lobby Nasscom estimates the size of the Indian cloud computing market to almost triple by 2022, growing at a compound annual pace of 30% to touch $7.1 billion.
The National Association of Software and Services Companies said in a statement that it estimated the size of the cloud market to be around $2.5 billion in 2018, dominated by infrastructure-as-a-service (cloud storage) and software-as-a-service segments.
According to Nasscom, cloud spending in India recorded a compound annual growth rate of 40.2% during 2016-2018. This was the second-fastest pace in the world, next only to China.
In 2018, cloud accounted for around 6% of the total IT spending, the lobby group said.
The industry association attributed this growth to the growing presence of “hyper-scale” cloud providers in big data, analytics, artificial intelligence (AI) and internet of things (IoT). Cloud has also emerged as an economic proposition for the Indian small and medium enterprises, large enterprises and government, Nasscom said.
“The technology is increasingly being embraced across businesses as well as consumers. Complementing the ecosystem are the futuristic technologies such as AI, machine learning (ML), analytics and the seamless adoption of SaaS, IaaS and PaaS (platform-as-a-service) offerings,” said Debjani Ghosh, president, Nasscom. “However, we need more innovation to reduce the cost of services for wider usage.”
The report was prepared by the IT industry body in collaboration with Google Cloud and Deloitte Touche Tohmatsu India LLP. Globally, cloud spending on IT is growing at 16.5% (CAGR) and is projected to touch $345 billion by 2022.
Nasscom's esimates appear to be more optimistic than those of Gartner. The global research firm said on Tuesday it estimated the size of India's public cloud market to increase from $1.96 billion last year to $2.5 billion in 2019 and $4.8 billion by 2022.
Nasscom also estimates that the Indian IaaS market will grow from $1 billion in 2018 to $2.4 billion by 2022, recording a CAGR of 25%. The Indian SaaS market will likely grow to $3.3 billion by 2022, expanding at 36% CAGR, the group said.
The key reasons behind the high growth of the cloud computing market are increased awareness, consumerisation of IT, proliferation of startups, a diverse landscape of supplier ecosystem, rising investments in infrastructure and availability of talent.
To maintain high growth, Nasscom recommended the government to set tangible time-bound targets for cloud and a sharper focus on infrastructural and operational factors such as reliable power supply and high-speed connectivity. Data localisation and privacy regulations will also accelerate cloud adoption, it added.