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Covid-19 to prompt surge in public cloud spend on DaaS, says Gartner

Shift to remote working has prompted CIOs to up their spending on cloud-based desktop offerings, with desktop as a service on course to become the fastest-growing part of the wider public cloud market this year

The Covid-19-induced shift towards remote working looks set to ensure that the desktop-as-a-service (DaaS) portion of the public cloud market will enjoy a bumper year of growth in 2020, according to Gartner data.

The market watcher’s global public cloud services market forecast suggests that the DaaS sector will experience the most growth in 2020, with spending expected to increase by 95% year on year to $1.2bn.

In 2019, DaaS spending topped $616m worldwide, with Gartner crediting the onset of the Covid-19 coronavirus pandemic as being a key factor in the expected spending growth this year.

“DaaS offers an inexpensive option for organisations that are supporting the surge of remote workers and their need to securely access enterprise applications from multiple devices and locations,” said Gartner in a research note.

Despite this forecast growth, the DaaS sector is on course to retain its position as the smallest sector – in terms of spend – within the wider global public cloud market through to 2022, when spending is expected to hit $2.5bn.

The overall public cloud market is forecast to grow by 6.3% in 2020 to $257.9bn, up from $242.7bn last year, with software as a service (SaaS) set to remain the largest market segment overall.

Spending on SaaS tools and technologies is on course to rise by 2.5% year on year to $104.7bn this year, with Gartner predicting a huge spike in spending of just over 15.5% between 2020 and 2021.  

“The continued shift from on-premise licence software to subscription-based SaaS models, in conjunction with the increased need for new software collaboration tools during Covid-19, is driving SaaS growth,” said the Gartner research note.

Similar trends will also ensure that the infrastructure-as-a-service (IaaS) segment of the market – the second-biggest overall – will grow by 13.4% in 2020.

“When the Covid-19 pandemic hit, there were a few initial hiccups, but cloud ultimately delivered exactly what it was supposed to,” said Sid Nag, research vice-president at Gartner.

“It responded to increased demand and catered to customers’ preference for elastic, pay-as-you-go consumption models.”

Read more about public cloud and Covid-19

Looking ahead, Gartner said it expects spending on public cloud services to grow rapidly in the coming years, as economies across the world bounce back from the pandemic, and as businesses re-evaluate their working habits.

“The use of public cloud services offers CIOs two distinct advantages during the Covid-19 pandemic – cost scale with use and deferred spending,” said Nag.

CIOs can invest significantly less cash upfront by utilising cloud technology rather than scaling up on-premise datacentre capacity or acquiring traditional licensed software.”

He added: “For the remainder of 2020, organisations that expand remote work functionality will prioritise collaboration software, mobile device management, distance learning educational solutions and security, as well as the infrastructure to scale to support increased capacity.”

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