Infrastructure-as-a-service (IaaS) revenue across Asia Pacific is forecast to increase at a compound annual growth rate of 11.2%, reaching US$39.3 billion in 2024.
The latest predictions by GlobalData show that the Asia Pacific region continues to be a vibrant market for IaaS, reflecting growing demand for cloud infrastructure services among enterprises.
IaaS is expected to be the fastest growing cloud market segment over the next five years, having accounted for 21% of total cloud computing revenue in APAC in 2019.
“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.
Government initiatives, which are introduced in line with other digitisation initiatives such as the ‘Digital India’ campaign in India and ‘Cloud-First Strategy’ by Malaysia, are expected to propel the development of the cloud services market in APAC.
“Maintaining and owning a data center is expensive and complicated. Against this backdrop, IaaS has emerged as a universal technology in the cloud environment,” added Ms. Singh.
China, Japan, India, Australia and South Korea are set to become the five largest IaaS markets within the APAC region, accounting for more than 80% of the overall market share by 2024.
As demand grows, IaaS vendors are focusing on strategic partnerships with the local and global telecom service providers to expand their presence in the region.
One example is the introduction of Amazon Web Services Wavelength for telecom operators, which has seen AWS partnering with Vodafone, KDDI, SK Telecom and Verizon to develop edge computing services on 5G networks across Europe, Japan and South Korea.
During Google’s Q1 2020 revenue results Scott Bertch, Partner and Head of Information Services Group Asia Pacific, said: “We continue to see growth in the IaaS segment as more and more enterprises shift their workloads to the public cloud, or to a hybrid cloud environment.”
IaaS is expected to encourage businesses to implement cloud infrastructure services within data centers to reduce operating costs and enhance productivity.
Malaysia’s Green Packet recently announced plans to raise up to US$23 million to fund their cloud business, with a focus on IaaS.
Three of China’s top cloud providers were also ranked as some of the biggest in the global IaaS market. Alibaba Cloud took third place worldwide, Tencent Cloud took fifth and Huawei Cloud placed sixth.
In 2019, Alibaba Cloud partnered with ZNet Technologies, an India-based cloud service distributor, to strengthen its presence across the country.