Trusted Business Insights answers what are the scenarios for growth and recovery and whether there will be any lasting structural impact from the unfolding crisis for the Cloud Computing market.
Trusted Business Insights presents an updated and Latest Study on Cloud Computing Market 2020-2029. The report contains market predictions related to market size, revenue, production, CAGR, Consumption, gross margin, price, and other substantial factors. While emphasizing the key driving and restraining forces for this market, the report also offers a complete study of the future trends and developments of the market.The report further elaborates on the micro and macroeconomic aspects including the socio-political landscape that is anticipated to shape the demand of the Cloud Computing market during the forecast period (2020-2029).It also examines the role of the leading market players involved in the industry including their corporate overview, financial summary, and SWOT analysis.
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Report Overview: Cloud Computing Market
The global cloud computing market size was valued at USD 155.9 billion in 2020 and is expected to expand at a Compound Annual Growth Rate (CAGR) of 13.8% from 2021 to 2027. Factors such as growing digital transformation among industries, rising penetration of internet and mobile devices across the world, and increase in consumption of big data are the primary drivers fostering the market growth. The development of next-generation industrial solutions will be cloud enhanced and require a cloud platform to showcase their digital business capabilities. Rise in adoption of Internet of Things (IoT), edge computing, 5G, use of real-time analytics enabled by Artificial Intelligence (AI) and Machine Learning (ML) is likely to boost the utility of this computing technology among organizations.
Cloud computing services cover a large number of functions, from the basics of storage, processing, and networking power through artificial intelligenceand Natural Language Processing (NLP) as well as standard office applications. It is estimated that by 2022, more computing power will be offered and deployed by Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) service vendors than by enterprise data centers. The industrial data suggest that deployment of these services is able to increase enterprise savings up to 35% of their annual operating costs. Moreover, other factors include functional capabilities that will help boost the business performances of the organizations.
As per the World Economic Forum, the fourth industrial revolution will be characterized by a fusion of technologies such as artificial intelligence, internet of things, and cloud computing. AI and cloud computing will complement each other along with IoT to improve technology and catalyze growth. Organizations across various verticals are proactively integrating cloud computing with these evolving technologies. For instance, in March 2019, Stelco Holdings Inc., a Canada-based steel company, partnered with Canvas Analytics Inc., to utilize the latters AI-enabled industrial IoT cloud platform to transform the formers operational data into actionable insights with the help of the real-time analytics solutions. Similarly, in the healthcare industry, Nuance Communications Inc.s., cloud-hosted PowerScribe One platform uses AI to aid in diagnostics and decision support for radiologists.
An important aspect of the market is the growing adoption by large enterprises as well as Small and Medium Enterprises (SMEs). With the growing demand for on-demand and need-based services, this computing has helped SMEs to compete in much larger business space. Moreover, the pay per subscription-based model offered by the service providers has provided SMEs the flexibility to grow to their full potential. Despite some market barriers such as security concerns and legacy systems, the market is anticipated to maintain a high growth pace in coming years.
Data security and privacy remains a primary concern among organizations wherein storage, use of information, and transmission must be digitally protected. Surveys suggest that about 60% of the business-sensitive information on hard drives is held insecurely. Data encryption, authorization management, access control, cloud integration, communication security, monitoring and auditing, and business continuity services are some of the important security services offered by the services vendors. For instance, vendors such as Google LLP, Microsoft Corporation, and Amazon.com Inc. provide 99.9% uptime, which relieves organizations from the burden of creating and maintaining recovery facilities and backup infrastructure.
COVID19 Impact Insights: Cloud Computing Market
The recent outbreak of COVID-19 (Coronavirus), a pandemic declared by the World Health Organization, has gravely impacted the economies worldwide. Major cities across the globe have been lockdown with operations of industries being temporarily suspended, and national governments being put in crisis mode. Thereupon, the employees across various industries especially dependent on IT services, have to work remotely to keep the businesses moving.IT resources enabled by cloud computing technology will enhance the access to data services and improve the connectivity between people and businesses on a global scale. Various media companies, financial establishments, educational institutions, and global enterprises will be able to operate and run applications for their customers and users on variety of mobile devices. In the wake of COVID-19 calamity, the work environments that can be operated remotely in technology-driven companies is likely to be benefitted by the cloud technology for a long period of time. This is also subsequently expected to favorably impact the market growth.
Service Insights: Cloud Computing Market
Software as a Service (SaaS) segment lead the cloud computing market with a share of over 54% in 2019 owing to its flexible costs, easy maintenance, and deployment. The industry estimates suggest that there is a rise in the number of companies moving towards cloud with 73% of enterprises moving almost all of their applications to SaaS platform. In addition, the IT industry survey suggests that by 2022, around 60% of the enterprises will utilize an external service providers cloud-managed service offering, which is twice the percentage of organizations from 2018. The IaaS and PaaS type segments have witnessed a steady demand owing to the adoption these services by numerous industry verticals across the world.
The growth of SaaS products will witness strong growth in the coming years as their Total Cost of Ownership (TCO) will equal to that of the on-premise deployment models. In 2018 alone, around 169 SaaS-based acquisitions took place with mean acquisition price standing at USD 1.3 billion. Qualtrics International Inc. by SAP SE (USD 8 billion) and GitHub Inc. by Microsoft Corporation (USD 7.5 billion) were the major acquisitions, recently witnessed in the industry. More mergers and acquisitions, the establishment of innovative startups in the cloud computing arena is likely to propel the market growth over the forecast period 2021-2027.
Workload Insights: Cloud Computing Market
The market is segmented on the basis of workload into application development and testing, data storage and backup, resource management, orchestration services, and others. The resource management segment accounted for the largest market share in 2019, owing to the benefits such as simplicity and low cost of ownership due to the multi-tenancy model over various cloud solutions. Increasing data-intensive workloads, infrastructure advancements to support large-scale execution of workflows, and development of hybrid cloud will increase the utility of resource management segment. Moreover, research and scientific establishments, and government institutions will be benefitted most by the utilization of cloud for resource management applications.
Application development and testing is likely to be the fastest-growing segment owing to the ongoing migration of applications over the cloud in various industry verticals and worldwide penetration of internet and mobile devices. In 2017, the Apple App store offered around 2 million different apps for download while Google Play offered approximately 2.2 million apps. The applications on cloud are being developed at an exponential rate across a range of verticals including entertainment, personal fitness, and education. Moreover, driven by customer demand for multi-dimensional testing of applications across various platforms enabled by cloud, DevOps, and Testing as a Service (TaaS), the app development and the testing segment is likely to gain traction in the coming years.
Enterprise Size Insights: Cloud Computing Market
Based on enterprise size, the market is bifurcated into large enterprises and SMEs. Large enterprises accounted for the major market share in 2019 owing to lower operating costs, better collaboration, increased flexibility, and improved time to market. Enterprises till now were using cloud for developing applications and hosting infrastructure, however, they are now utilizing cloud to modernize core business applications and processes. As per the estimates made by Cisco Systems Inc., more than 94% of the workloads will be processed through cloud data centers by 2021.
However, SMEs is estimated to be the fastest-growing segment during the forecast period owing to the flexible pricing models offered by CSPs, boost in employee productivity, and improvement in collaboration and innovation. The IT industry survey reports that by the end of 2018, 88% of the SMEs have been using at least one cloud service and is likely to increase rapidly in the coming years. The SMEs are widely using the technology for marketing, financial management, project management, and building customer relationships, among others. However, the top priorities for the enterprises adopting cloud are managing and optimizing cloud costs, setting policies for cloud use, and deciding the choice of cloud to run particular applications.
End-Use Insights: Cloud Computing Market
The market is segmented on the basis of end-use into BFSI, IT and telecom, manufacturing, retail and consumer goods, media and entertainment, and government and public sector, among others. BFSI sector accounted for the largest market share in 2019 owing to the adoption of cloud services for storage and management of customer data. Factors such as interoperability, secure storage, and 247 uptime, among others have helped BFSI sector to focus more on the customer-centric business model and digitalization of trade and wealth. Furthermore, services such as payment gateways, online fund transfer, digital wallets, and unified customer experience will play a significant role in the BFSI industry, facilitating the overall shift to cloud deployment.
Manufacturing industry is estimated to be the prime adopter of the cloud services owing to benefits such as seamless data management and real-time visibility offered by this technology. Moreover, the manufacturing sector uses these computing services for managing services, planning enterprise resources, handling supply chain management, and storing information related to enterprise manufacturing. In addition, this computing technology will play a major role in enabling and democratizing new manufacturing production systems such as generative design, 3D printing, and IIoT. Moreover, the industries report that digital services such as cloud computing provides around 25% of the total inputs to manufacture a finished product.
Deployment Insights: Cloud Computing Market
Public, private, and hybrid are the types of deployment methods used by industry players. Public deployment accounted for the major market share in 2019 and is predicted to maintain its dominance over the coming period. The scalability and flexibility of cloud technology, security aspects, and control over the data center are some of the prime factors that will boost the utility of technology. As per the tech industry experts, around 60% of workloads are run on a hosted cloud service as of 2019.
Hybrid deployment with an integrated environment including public and private models will present a significant growth rate in the coming years. Hybrid model has been emerging as the most preferred implementation model among industries that will drive the progression of the cloud industry. The industry insights reveal that around 77% of the global enterprise infrastructure decision-makers who are planning, upgrading, or implementing cloud technology prefer hybrid environment. Moreover, the combination of edge computing and hybrid cloud computing will add value proposition to organizations wherein, hybrid platform will aggregate the relevant data and edge computing will support processing and real-time analytics seamlessly.
Regional Insights: Cloud Computing Market
North America lead the market with a share of 49% in 2019 owing to early adoption of cloud computing solutions. Presence of numerous vendors in the region such as Microsoft Corporation; Oracle Corporation; Amazon.com Inc.; and IBM Corporation coupled with the higher propensity to adopt new technologies is expected to help these regions strengthen their market positions. The European market follows North America owing to high adoption of cloud computing in countries such as Sweden, Denmark, France, Germany, and Finland. The European countries have become a hub for technology development, particularly in the financial sector, which attracts billions of dollars in investment across the globe.
Asia Pacific region is likely to be the fastest-growing region in the market over the forecast period. The rapid growth of China and India coupled with emergence of regional players such as Alibaba Group has had a positive impact in the regional market growth in recent years. Moreover, to meet data sovereignty needs of the governments, hyper-scale cloud providers such as Azure, Amazon Web Services (AWS), and Google LLP are establishing their data centers in markets such as Indonesia and Thailand. Moreover, the formation of the Asia Cloud Computing Association, a forum based in the APAC region with the collaboration of Cisco Systems, EMC Corporation, Microsoft, Alcatel-Lucent, NetApp, Rackspace, REACH, Telenor, Nokia Siemens Networks, Verizon, and PLDT/Smart is likely to boost the regional market growth.Cloud Computing Market Share Insights
are some of the prominent players present in the market. Partnerships, strategic mergers and acquisitions are anticipated to be the most effective way for industry players to gain quick access in emerging markets and enhance technological capabilities. Also, product differentiation and up-gradation is expected to pave the way for the development of companies in the market. Moreover, the rising startup culture and transport analytics startups such as Databricks; Uptake Technologies Inc.; Rubrik; D2iQ, Inc.; Vlocity Inc.; Confluent Inc.; Stratoscale; and SecurityScorecard will pose potential competition in the market.
In February 2020, Google LLP acquired Cornerstone Technology, a Netherlands-based company specialized in migrating enterprises workloads from mainframes to the public cloud. The acquisition is expected to help Google LLP to enhance its solutions and increase its customer base across the European region. In October 2018, IBM acquired the worlds leading open-source cloud software provider Red Hat. With the acquisition of Red Hat, IBM is now able to expand its cloud computing offerings to a broader range of clients.This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Trusted Business Insights has segmented the global cloud computing market report on the basis of service, workload, deployment, enterprise size, end-use, and region:
Service Outlook (Revenue, USD Billion, 2016 2027)
Workload Outlook (Revenue, USD Billion, 2016 2027)
Application Development & Testing
Data Storage & Backup
Deployment Outlook (Revenue, USD Billion, 2016 2027)
Enterprise Size Outlook (Revenue, USD Billion, 2016 2027)
Small & Medium Enterprise
End-Use Outlook (Revenue, USD Billion, 2016 2027)
IT & Telecom
Retail & Consumer Goods
Energy & Utilities
Media & Entertainment
Government & Public Sector
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