Cloud Computing Market

Cloud Computing Market Outlook 2031

The global cloud computing market size was valued at USD 493.89 Billion in 2022 and is projected to reach USD 1.72 Trillion by 2031, expanding at a CAGR of 14.9% during the forecast period 2023 - 2031. The growth of the market is attributed to the increasing demand for cloud-based solutions and the rising adoption of innovative technologies, such as artificial intelligence (AI) and machine learning (ML).

Rising adoption of new technologies contributes to the growth of the market. Companies are increasingly inclined towards adopting new technologies and prioritizing the tracking of customer experience. This shift in company preferences is driving the growth of the market. Companies enhance their operations, streamline processes, and gain a competitive edge by embracing new technologies. This includes the adoption of cloud computing solutions, which offer scalability, flexibility, and improved efficiency.

• In May 2022, Google LLC and SAP SE announced an expansion of their collaboration to enhance customer service. Google Workspace and SAP S/4HANA Cloud enable customers to seamlessly integrate Google Docs and Google Sheets features within their SAP software, providing a more streamlined and efficient experience.

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Cloud computing is an IT service model where third-party service providers offer software tools and computing resources through the Internet. In this model, the user has to pay only for the usage of the computing device, coupled with bandwidth, and storage they consume. Cloud computing has several advantages over on-premise infrastructure.

The research report finds that the COVID-19 pandemic boosted the cloud computing market. The pandemic has resulted in a surge in demand for cloud computing services, due to the rapid shift towards remote work and digital transformation initiatives. This encouraged businesses to adopt remote work policies to maintain business continuity. Cloud computing played a crucial role in enabling remote work by providing access to critical applications and data from anywhere at any time. This boosted the demand for cloud infrastructure and collaboration tools.

The pandemic has accelerated digital transformation initiatives across industries. Thus, various businesses increasingly adopted cloud-based solutions to streamline their operations, enhance customer experience, and improve their agility. This has led to increased demand for cloud services, such as Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS).

Impact of Artificial Intelligence (AI) on Cloud Computing Market

The integration of artificial intelligence technologies has a significant impact on the cloud computing market. AI capabilities are being increasingly incorporated into cloud computing services, enabling businesses to harness the power of AI in various applications. Cloud computing plays a crucial role in supporting AI applications in healthcare by providing the necessary computational power and storage capabilities.

• In June 2023, HCLTech, a global technology specialist, and Google Cloud announced an expansion of their strategic cooperation. This collaboration aims to support organizations in harnessing the power of generative artificial intelligence (AI) and developing innovative solutions by leveraging Google Cloud's generative AI capabilities.

Cloud computing facilitates the secure storage and sharing of sensitive healthcare data, ensuring compliance with regulations, such as HIPAA (Health Insurance Portability and Accountability Act). Additionally, cloud-based AI platforms enable healthcare providers to collaborate and share insights across different locations, which enhances the efficiency and effectiveness of healthcare delivery.

Cloud Computing Market Dynamics

Major Drivers

Increasing adoption of cost-effective solutions is driving the market. Rising competition and the global economic situation are expected to boost the adoption of cost-effective solutions, to maintain their operations and improve their efficiency. This has led to an increase in the adoption of cloud computing services, which offer cost-effective solutions for businesses. Furthermore, the companies are highly adopting cloud computing services, which further drives the market.

• In November 2022, Moro Hub and Omniclouds, an SD-WAN Managed Service Provider (MSP), announced a partnership, to facilitate enterprise modernization through cloud-based services. The agreement enables Moro Hub to leverage Omniclouds' SD-WAN services and solutions, which include connectivity, cloud migration, and security-managed services.

Increasing use of technologies, such as edge computing, Internet of Things (IoT), real-time analytics, and 5G, is anticipated to boost the cloud computing market. Edge computing processes and stores the data quickly, which reduces latency and improves efficiency. IoT devices generate vast amounts of data that require processing and storage, which is efficiently managed through cloud computing. The use of real-time analytics requires cloud computing services to process data in real time and generate insights.

Existing Restrain

Rising concern of security is expected to hamper the market. Data stored in cloud computing systems is prone to cyber-attacks. The risk of cyber-attacks increases, as businesses move their data and applications to the cloud. Cybercriminals exploit vulnerabilities in cloud systems to gain unauthorized access to sensitive data, resulting in data breaches and other security incidents.

Data breaches lead to significant financial losses, legal liabilities, and reputational damage for businesses, which deter them from adopting cloud computing solutions. The potential risks associated with cloud security make businesses hesitant to entrust their sensitive data to third-party cloud service providers.

Emerging Opportunities

Growing demand for hybrid and multi-cloud solutions is expected to create lucrative opportunities in the market, as businesses seek to optimize their IT infrastructure. This presents an opportunity for service providers to offer seamless integration and management of multiple cloud platforms, providing businesses with flexibility and scalability. Furthermore, developing industry-specific cloud solutions, such as healthcare, finance, or retail, presents an opportunity to cater to the specific needs of those sectors and establish a competitive advantage.

Edge computing has gained prominence, with the rise of Internet of Things (IoT) devices and the need for real-time data processing. Cloud service providers seize the opportunity by offering edge computing solutions that enable businesses to process and analyze data closer to the source, reducing latency and improving performance.

 Scope of Cloud Computing Market Report:

The report on the cloud computing market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Cloud Computing Market Segment Insights

Service Segment Analysis

Based on service, the global cloud computing market is segregated into software as a service (SaaS), infrastructure as a service (IaaS), and platform as a service (PaaS). The software as a service (SaaS) segment is anticipated to expand at a rapid pace during the forecast period, owing to easy maintenance, flexible costs, and easy deployment. Rising demand for remote working boosts the demand for SaaS services, as it allows to access previously centralized data.

• In April 2022, Salesforce introduced industry-specific Customer Relationship Management (CRM) Analytics, a powerful AI-powered Platform-as-a-Service solution. This innovative offering empowers Salesforce customers from various industries to gain predictive analytical insights. The personalized experiences and actionable insights allow users to make informed decisions to drive their business forward.

The infrastructure as a service (IaaS) segment is projected to account major market share in the coming years, owing to the rising demand for IT infrastructures and cost-efficient deployment services for data centers. IaaS allows users to customize and access storage capacity, enables businesses to launch new applications, and helps to manage the purchase of on-premise hardware. In addition, the growing need to deploy enterprise-based computing capabilities is anticipated to augment the usage of cloud computing.

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Workload Segment Analysis

On the basis of workload, the global cloud computing market is divided into application development and testing, data storage and backup, resource management, orchestration services, and others. The resource management segment is expected to hold the major share of the market in the coming years, due to the low cost of ownership and simplicity.

Increasing data-intensive workload, development of a hybrid cloud, and advancement in infrastructure to support huge workflows are expected to increase the efficiency of the resource management segment. Additionally, government institutions and research & scientific establishments are projected to benefit from cloud resource management applications.

The application development & testing segment is projected to expand at a rapid pace during the forecast period. The growth of the segment is attributed to the ongoing relocation of applications over cloud computing and the increasing usage of mobile devices and the internet. For instance,

• In February 2023, Akamai Technologies, Inc. unveiled the Akamai Connected Cloud platform. This innovative solution combines content delivery, security, and cloud computing to enhance user experience and keep applications secure by bringing them closer and mitigating potential threats.

Deployment Segment Analysis

In terms of deployment, the global cloud computing market is classified as public, private, and hybrid. The public segment is expected to expand at a substantial CAGR during the forecast period, due to the rising automation among small & medium size enterprises, increasing penetration of connected devices, and digital transformation. Factors such as flexibility and scalability of cloud technology, control over data centers, and security aspects are projected to boost the segment.

The hybrid segment is expected to grow at a rapid pace in the coming years, owing to the rising use of cloud-based solutions by SMEs, to reduce operational costs and increase productivity. Additionally, the mixture of hybrid and edge computing is estimated to increase the value of organizations.

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Enterprise Size Segment Analysis

Based on enterprise size, the global cloud computing market is bifurcated into large enterprises and small & medium enterprises (SMEs). The large enterprise segment is anticipated to hold the major market share during the projection period. Increased flexibility and low operating costs of cloud computing services allow large enterprises to use this technology to streamline processes and access centralized data. Furthermore, the rapid expansion of large enterprises across the globe is likely to boost the segment.

The small & medium enterprises (SMEs) segment is projected to expand at a high CAGR during the forecast period, due to the growing requirement to boost employees’ productivity. SMEs heavily use cloud computing services for financial management, marketing, project management, and building customer relationships. The growing requirements to reduce operating expenses and streamline workflows boost the demand for cloud computing services, which further propels the market.

End-user Segment Analysis

On the basis of end-user, the global cloud computing market share is fragmented into BFSI, IT & telecom, manufacturing, retail & consumer goods, media & entertainment, and government & public sector. The BFSI segment held a large market share in 2022, owing to the increasing adoption of cloud services for the management and storage of customer data.

The BFSI sector has highly benefited from cloud computing, as it enabled innovation, cost reduction, flexibility, and improved client relationships. The adoption of cloud computing services for data storage and management boosts the market. Various services, such as payment gateways, funds transfer capabilities, digital wallets, and unified customer experiences, significantly aid the BFSI sector in transitioning to the cloud.

The manufacturing segment is anticipated to register robust growth in the coming years owing to the early adoption of cloud services. Its benefits such as real-time visibility and unified data encouraged its adoption. Moreover, manufacturers heavily use cloud computing services for planning resources, managing services, storing information, and supply chain management. For instance,

• In February 2022, SAP SE, a software-based company in Germany, announced the launch of a sovereign cloud platform for domestic data processing.

Regional Analysis

In terms of regions, the global cloud computing market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in North America held around 36% market share in 2022, owing to the early adoption of cloud solutions, such as virtual reality, augmented reality, LTE technologies, 4G, 5G, Artificial Intelligence, and big data analytics. Moreover, the presence of several renowned companies, such as Microsoft, IBM, and Oracle, in the region is expected to drive the market.

The market in Asia Pacific is anticipated to expand at a significant CAGR during the forecast period. The easy availability of skilled labor and the keen willingness of SMEs to grow drive the market. The presence of major players, such as Alibaba Group, Amazon Web Services (AWS), Azure, several government initiatives, and the rising collaborations to meet the growing demand are anticipated to boost the market in the region. For Instance,
 

• In September 2022, Google Cloud and NASSCOM announced a partnership to launch a new cloud computing course in India. The course is designed for students to prepare them for entry-level cloud jobs and consists of five modules. It covers various topics, such as cloud basics, cloud computing, big data, and machine learning. It provides participants with hands-on experience in cloud computing.

 

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Segments

The global cloud computing market has been segmented on the basis of

Services

• Software as a Service (SaaS)
• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)

Workload

• Application Development and Testing
• Data Storage and Backup
• Resource Management
• Orchestration Services
• Others

Deployments

• Public
• Private
• Hybrid

Enterprise Size

• Large Enterprises
• Small Enterprises (SMEs)

End-user

• BFSI
• IT & Telecom
• Manufacturing
• Retail & Consumer Goods
• Media & Entertainment
• Government & Public Sector

Regions

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Adobe Inc.
• Alibaba Group Holding Limited
• Alphabet Inc.
• Amazon.com Inc.
• AWS
• Cisco Systems
• Dell EMC Corp.
• Google LLC
• IBM Corporation
• Microsoft Corporation
• Oracle Corporation
• Rackspace Inc.
• Salesforce.com Inc.
• SAP SE
• SAS Institute Inc.
• TIBCO Software Inc.
• VMware, Inc.
• Workday, Inc.

Competitive Landscape

Key players competing in the global cloud computing market include Adobe Inc.; Alibaba Group Holding Limited; Alphabet Inc.; Amazon.com Inc.; AWS; Cisco Systems; Dell EMC Corp.; Google LLC; IBM Corporation; Microsoft Corporation; Oracle Corporation; Rackspace Inc.; Salesforce.com Inc.; SAP SE; SAS Institute Inc.; TIBCO Software Inc.; VMware, Inc.; and Workday, Inc.

Some of the major strategies adopted by key players are mergers & acquisitions, and partnerships to gain easy access to the markets of developing countries and improve technological capabilities.

• In January 2023, TTEC Holdings, Inc., a provider of global customer experience technology and services, announced a partnership with Google Cloud. This collaboration enables customers to utilize Google's contact center-as-a-service features for real-time customer interactions across digital channels.

• In February 2022, Amazon announced a partnership with Kyndryl, a major provider of IT infrastructure services. The collaboration aimed to establish an AWS cloud center of excellence (CCOE), allowing Kyndryl to leverage AWS cloud infrastructure to enhance its customer experience.