Public cloud services vendor revenue grew 30.1% year-on-year (YoY), reaching $1.01 billion in 2018, according to IDC New Zealand's public cloud services tracker.

Software-as-a-service (SaaS) revenue, followed by infrastructure-as-a-service (IaaS) revenue continue to contribute the largest portion of cloud services revenue in 2018.

PaaS was the only primary market to increase its growth rate in 2018 in comparison to 2017. PaaS revenue achieved a YoY growth of 45.6% in 2018.

Chayse Gorton, ANZ market analyst for IT services, says, "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.

Gorton adds, "Many businesses are purchasing PaaS solutions from their existing IaaS provider." This trend is putting pressure on less-established IaaS providers, as forward-looking organisations seek to enable a future transition to PaaS solutions.

Increasingly organisations will seek out PaaS solutions with specific capabilities; such as analytics and artificial intelligence, and data management capabilities. These two secondary markets are already in hot demand, accounting for 62.9% of PaaS revenues in 2018.

In 2019, IDC predicts that PaaS solutions will gain share in the public cloud services market as more organisations embrace cloud-native application development processes. PaaS solutions that can deliver on specific capabilities will be highly sought after by technology buyers.

Therefore, to succeed in the PaaS market, it will not be enough to rely on existing IaaS customers; instead, vendors must be on a continuous journey to add innovative features into their platform.

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