The public cloud has emerged as an important technology platform since its advent about two decades ago, offering benefits to businesses that extend far beyond convenient data storage and innovative applications. By boosting internal productivity, ensuring a robust security environment and providing the technology and tools such as artificial intelligence and machine learning to enable digital transformation, the public cloud makes it possible for companies to develop new revenue streams and drive higher productivity within their organizations.
In this report we will look at the benefits the public cloud has brought to six key markets in Asia Pacific (APAC) – Australia, India, Indonesia, Japan, Singapore, and South Korea – and the economic impact that each of these markets stand to gain from the adoption of the public cloud over the next five years.
Each of these six markets are at different stages in the evolution of their use of the public cloud. Each of them, however, will experience a positive economic impact as industries in these markets explore new revenue streams and improve productivity by operating applications over the public cloud.
Our research into public cloud use in both the public and private sector in each of these markets finds that if growth in public cloud spending continues at its present compound annual growth rate (CAGR) of 25%, it will contribute to a total economic impact of about US$450 billion across the six markets between 2019 and 2023. This impact, which includes the direct impact on the industry users of public cloud as well as second order effects driven by business growth across the supply chain of industry users and increased consumer spending, is comparable to the annual GDP impact of many of the region’s large traditional industry sectors. Our survey of business leaders and senior IT decision makers reveals that most expect revenue uplift to be a meaningful driver of the overall economic impact within their business. In addition to the economic impact, public cloud provides potential to improve productivity of the economy through availability of digital government services which drives a significant improvement in citizen experience within these markets.
The direct effects of the economic boost will produce approximately 425,000 jobs, with about 1.2 million additional jobs being influenced by second order effects of deployment of public cloud. Industry users rather than cloud service providers (CSPs) will be the major source of GDP contribution and job growth.
While public cloud technology holds a great deal of promise for the region, we also found that there are a number of challenges that, if left unchecked, may slow down the potential economic growth that can be activated.
There is a growing need for digital talent skilled to use public cloud technology, part of which can be addressed through the re-skilling and up-skilling of the existing workforces. Large traditional businesses can also find it cumbersome to migrate their massive workloads to the public cloud. In some of these markets, the connectivity infrastructure needs to be improved so that public cloud service can be more reliable. Data privacy is another concern for many businesses, and CSPs need to invest more time in educating users on the benefits that public cloud can provide on these fronts. A policy regime consistent with international best practices would also make it easier for CSPs to rapidly launch new products that cater to market requirements and drive interoperability within their services in a cost-optimal manner.
This reports looks at how all three stakeholders—service providers, user organizations, and governments—can work together to mitigate such challenges in order to maximize the impact they can derive from the public cloud.
If these challenges were to persist or even worsen, the overall economic impact would reduce by about US$ 75 billion , producing a total economic impact of around US$375 billion over 2019-23, resulting in the addition of about 235,000 direct jobs and influence another 715,000 through the second order effects.
On the other hand, if the challenges in these six markets can be overcome, the total economic impact due to public cloud could increase to about US$580 billion, and result in the addition of about 770,000 direct jobs and influence as many as 2.1 million jobs from the second order effects.
The path forward for all six markets points to continued growth in their use of the public cloud. The extent to which they experience an economic lift-off, however, will depend on whether the environment is conducive to investing in the new technology-driven engines powered by advanced analytics, artificial intelligence (AI), machine learning (ML) and productivity tools. Each of these markets can seize the opportunity to unlock the potential benefits of the public cloud, but providers, users and governments must recognize the transformative opportunities that lie ahead, and make favorable growth conditions a priority.