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Global revenues from public cloud services will hit more than $195 billion (£150.2bn) by 2020, according to the latest forecast from analyst house IDC.

The new prediction, which arrives in the firm’s semi-annual public cloud services spending guide, argues 2020 will double 2016’s expected revenues of $96.5bn, and represents a compound annual growth rate (CAGR) of 20.4% between 2015 and 2020.

“Cloud software will significantly outpace traditional software product delivery over the next five years, growing nearly three times faster than the software market as a whole and becoming the significant growth driver to all functional software markets,” said Benjamin McGrath, IDC senior research analyst for SaaS and business models. “By 2020, about half of all business software purchases will be of service-enabled software, and cloud software will constitute more than a quarter of all software sold.”

According to the IDC analysis, manufacturing, banking, and professional services represent almost a third of public cloud services revenues in 2016. The US is expected to be the largest market for public cloud with almost two thirds of revenues, followed by Western Europe and the snappily-titled Asia/Pacific excluding Japan (APeJ).

“Cloud computing is breaking down traditional technology barriers as line of business leaders and their IT organisations rely on cloud to flexibly deliver IT resources at the lower cost and faster speed that businesses require,” said Eileen Smith, program director of customer insights and analysis. “Organisations across all industries are now free to adapt to market changes quicker and take more risks, as they are no longer bound by legacy IT constraints.”

Previous IDC research focused on EMEA cloud IT infrastructure, which grew by 17% to $1.3bn in the first quarter of this year. The second quarter figures are yet to be disclosed, but the analyst house warned of the potential impact the Brexit EU referendum vote could have.