Worldwide revenue for public cloud-based infrastructure as a service (IaaS) networking services is projected to reach $19.4 billion in 2023, according to a new report from IDC.
The report highlights how networking to and within cloud environments has grown significantly for enterprise customers as more and more applications, workloads, and data are moved to the cloud. The findings are supported by another recent study by Gartner showing the overall IaaS market grew by 29.7%, reaching a total value of $120.3 billion compared to $92.8 billion in 2021.
The IaaS Market: 5 Year CAGR
The market is expected to see strong growth through 2026 with a compound annual growth rate (CAGR) of 27.9% for the period from 2022 to 2026, according to IDC.
The largest segment of the IaaS networking market is cloud connects/interconnects while the second-largest technology segment is cloud WAN
In 2022, the top 5 vendors in the public cloud IaaS market were Amazon Web Services, Microsoft, Google, Alibaba, and Tencent. Those providers accounted for 85.7% of the total market spend in 2022 with AWS capturing more than half the total.
Worldwide IaaS Revenue: Additional Commentary
Taranvir Singh, research manager, Cloud Networking Services, IDC, commented:
"IaaS network services play a critical role in helping organizations build modern digital IT and business capabilities that have all the cloud characteristics of agility, flexibility, resilience, elasticity, and scalability.”
Rohit Mehra, group vice president, Network and Telecommunications, IDC, said:
"Cloud connects/interconnects are foundational to every cloud strategy as these make it possible for enterprises to quickly and securely connect their on-premises and edge environments to IaaS providers. The rise of multicloud and SaaS applications that meet the demands of the modern distributed workforce in enterprises is the driver of rapid growth in cloud WANs and other IaaS network services.”
