The surge of public cloud services will continue in 2022, and nearly capture $495 billion in global spending this year, according to Gartner. This represents a 20.4% increase in spending from 2021.

The market research firm predicts public cloud spending will reach nearly $600 billion by the end of 2023.

“Cloud is the powerhouse that drives today’s digital organizations,” Gartner VP Sid Nag said in a statement. “CIOs are beyond the era of irrational exuberance of procuring cloud services and are being thoughtful in their choice of public cloud providers to drive specific, desired business and technology outcomes in their digital transformation journey.”

The most successful IT leaders view the cloud as an enabler, and organizations that combine cloud services with other emerging technologies will fare even better, he added. 

Spending increases are projected to occur in every layer of public clouds with infrastructure-as-a-service (IaaS) and desktop-as-a-service leading the way with 30.6% and 26.6% year-over-year jumps, respectively.

Software-as-a-service (SaaS) will continue to claim the largest share of public cloud spending in 2022, jumping almost 16.1% year over year to $176.6 billion, according to Gartner. IaaS will capture $119.7 billion, followed by platform-as-a-service (PaaS) with $109.6 billion, and cloud business process services running on PaaS at almost $55.6 billion.

Gartner also expects cloud management and security services spending to hit nearly $30.5 billion while desktop cloud-based services are on pace to surpass $2.6 billion this year.

“Cloud-native capabilities such as containerization, database PaaS and artificial intelligence/machine learning contain richer features than commoditized compute such as IaaS or network-as-a-service,” Nag said. “As a result, they are generally more expensive, which is fueling spending growth.” 

Hyperscale edge computing and secure access service edge (SASE) are also forming new product categories for public cloud providers and creating additional revenue streams, he added. 

“Driven by maturation of core cloud services, the focus of differentiation is gradually shifting to capabilities that can disrupt digital businesses and operations in enterprises directly,” Nag said. “Public cloud services have become so integral that providers are now forced to address social and political challenges, such as sustainability and data sovereignty.”