Public cloud services vendor revenue grew 30.1 per cent year-on-year to just breach $1 billion in 2018, according to IDC New Zealand.
Software-as-a-service (SaaS) revenue, followed by infrastructure-as-a-service (IaaS) revenue continued to contribute the largest portion of cloud services revenue in 2018.
Platform-as-a-service (PaaS), however, was the only primary market to increase its rate of growth in 2018 in comparison to 2017. PaaS revenue achieved year-on-year growth of 45.6 per cent in 2018.
Chayse Gorton, A/NZ market analyst for IT services, said PaaS adoption is growing as organisations embrace cloud-native application development processes in higher numbers.
To enable cloud-native application development organisations are increasing the amount spent on application development and deployment platforms.
Many businesses are purchasing PaaS solutions from their existing IaaS provider, he said.
This trend is putting pressure on less-established IaaS providers, as organisations seek to enable a future transition to PaaS.
Organisations will increasingly seek out PaaS solutions with specific capabilities; such as analytics and artificial intelligence, and data management capabilities, IDC predicts.
These two secondary markets already account for 62.9 per cent of PaaS revenues in 2018.
IDC predicts that PaaS will gain share in the public cloud services market as more organisations embrace cloud-native application development processes. In particular, PaaS that can deliver on specific capabilities will be highly sought after by technology buyers.
To succeed in the PaaS market, therefore, it will not be enough to rely on existing IaaS customers. Instead, vendors must add innovative features into their platforms.