The global cloud computing market was estimated at USD 274.79 billion by 2020. It is predicted to expand by a compound annual growth of (CAGR) in the range of 19.1 per cent from 2021 until 2028. The introduction of cutting-edge technologies, including Artificial Intelligence (AI) and machine learning, allows cloud growth by empowering companies to use AI capabilities. While managers, companies and employees continue to choose remote work because of the COVID-19 virus, the trend has been recognized as the most recent trend and is likely to continue over the long run. The virus is predicted to bring about one of the most considerable changes to the workplace. In addition, the pandemic is also changing how businesses utilize advanced technologies, including supercomputing on mobile devices, Internet of Things (IoT), big data, and AI, to speed up the process of accelerating the pace of Industry 4.0 as the Fourth Industrial Revolution.
The market for cloud computing multiplied the pace of demand in the third quarter of 2020 as companies continued to move their work from traditional platforms to digital formats. The primary driving forces driving the market are the increasing use of consumer IT as well as the diversity of providers, the need for flexible IT thinking, greater demand for skilled workers as well as increased awareness of the advantages of cloud computing the government initiatives to encourage the adoption of cloud computing, the rise of new technologies, and an increase in the size of ecosystems for startups.
The COVID-19 restrictions around the globe have heightened the requirement for accessible and connected systems to control the flow of information across the entire enterprise. Companies that haven’t yet embraced cloud computing and are using spreadsheets and tools that are not connected for their engineering tasks have had a difficult time in the course of the COVID-19 epidemic swiftly reorganizing their operations. The companies have begun to evaluate the advantages of implementing cloud computing.
The cloud’s trends are the primary driver of an organization’s investment strategy and digital business decision-making procedures, as well as the selection of technology and vendors. Rapid digitalization is causing companies to upgrade their applications and infrastructure to improve efficiency and agility in business. Through cloud applications and cloud services, businesses can facilitate their most essential business processes efficiently, shift work processes to cloud-based platforms and reduce the network’s latency. Cloud computing provides greater efficiency and speed to adjust and manage business operations under changing marketplace conditions. It helps to simplify the consumption of technology. Furthermore, cloud computing has opened up new possibilities for creating highly engaging customer experiences. Cloud computing has triggered a behavior change in people and businesses and allowed a range of businesses to navigate the technology policies and accomplish their goals.
Businesses across the world require integrated platforms that facilitate collaboration across various disciplines. This is expected to increase the need for cloud computing due to the numerous advantages it provides to these industries. Additionally, a significant increase in the number of businesses that offer cloud-based deployment and subscription-based models for their products is anticipated to fuel growth. For example, in March 2018, Adobe introduced Adobe Experience Cloud Device Co-op. It is a shared network designed to help companies better communicate with their customers via various devices and digital touchpoints while keeping their privacy and transparency.
Data security and privacy are the top concerns for businesses, as storage and the use and transmission of data must be secured digitally. Studies suggest that around 60% of sensitive business data stored on hard drives are not secured. Data encryption security management for authorization, control of access cloud integration, security for communications monitoring and auditing and business continuity solutions are just a few of the essential security features offered by vendors. For instance, vendors like Google LLP, Microsoft Corp., and Amazon.com, Inc. offer 99.9 per cent uptime. This helps organizations avoid the burden of establishing and maintaining backup infrastructure and recovery facilities.
It is believed that the Software as a Service (SaaS) segment will be responsible for the most revenue, exceeding 54% by 2020. The growing demand for SaaS is due to its cost flexibility and ease of maintenance and deployment. Industry estimates indicate that there’s an increase in the number of businesses switching to cloud computing and 73% of companies switching the majority of their apps towards SaaS. SaaS platform. Furthermore, the IT survey of the industry indicates that in 2022, approximately 60% of enterprises will be using external service providers’ cloud-managed service solutions, more than double as high as the proportion of businesses in the year 2018.
SaaS products will likely grow significantly in the near future because they will have a total Cost of Ownership (TCO) similar to the cost of the model of deployment on-premises. In 2018, 169 SaaS-related acquisitions occurred, with an average acquisition cost estimated at USD 1.3 billion. Qualtrics International, Inc. through SAP SE (USD 8 billion) and GitHub Inc. by Microsoft Corporation (USD 7.5 billion) were the most significant acquisitions. With the emergence of deals and mergers in the pipeline, the development of new startups that are innovative in the cloud computing space will drive the growth of the market during the coming years.
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The private deployment segment was responsible for the most significant market share, which was more than 40% in 2020. The private cloud only provides computing services via an internal private network or the internet and is accessible to a select group of users, not the general public. It can offer several advantages for businesses, such as scaling, self-service, and elasticity, in addition to more customization and control in on-premise computing infrastructure. The private cloud also offers better privacy and security by using private cloud hosting and firewalls that provide high-quality data protection to third-party service providers.
The hybrid deployment model, an integrated model that includes private and public models, is expected to see significant growth over the coming time. The hybrid model has become the most popular implementation model for various industries. The increasing focus on the development of hybrid cloud models and innovative strategies employed by various organizations helps enhance business processes efficiency, use of resources, cost reduction user experience, and modernization of applications to maximize advantages. Edge computing is emerging as one of the significant factors that will drive the use of a hybrid cloud model in enterprises worldwide.
Enterprise Size Insights
The large enterprise segment represented the largest market share, which was more than 51 per cent in 2020. The reason for this is lower operating expenses, better collaboration, greater flexibility, and a faster market speed. Enterprises have utilized the cloud to build applications and rehost infrastructure, but they are now using cloud computing to modernize their core business processes and applications. According to estimates provided by Cisco Systems, Inc., a software-based company, over 94% of all jobs will be processed through cloud-based data centres by 2021.
Small & Medium Enterprises (SMEs) are predicted to be the fastest-growing sector over the forecast time frame due to the flexibility of pricing models provided by CSPs, increased productivity among employees, and improved collaboration and creativity. Cloud computing can help SMEs to cut down on routine chores, prioritize work and enhance collaboration between teams. The segment’s growth could be explained by the growing number of SMEs in developing countries such as China and India. In addition, SMEs’ increasing demand for cloud computing to improve workflow efficiency and reduce operating costs is anticipated to drive the segment’s growth.
The BFSI segment had the most significant market share, which was more than 25% in 2020. The segment’s growth can be attributable to the widespread use of cloud-based services for managing and storing customers’ information. Benefits such as security, interoperability, and uptime of 247 have made the BFSI sector concentrate more on a business model centred around the customer and the digitalization of trade and wealth. Additionally, services such as payment gateways, online money transfers, electronic wallets and unified customer experiences are anticipated to play an essential part in the BFSI sector, helping to facilitate the shift towards cloud-based services.
The manufacturing industry is anticipated to be the most prominent user of cloud-based services due to advantages like seamless data management and live monitoring. Additionally, the manufacturing industry utilizes computing services for planning corporate resources, managing supply chain management, and keeping information about manufacturing in the enterprise. Cloud computing is an efficient way to analyze and access vast amounts of data across the manufacturing sector. These services assist manufacturers in gaining tremendous benefits in terms of speed, cost, and access. Furthermore, they provide continuous flexibility, innovation focus on business, the ability for scale and cost savings. They are expected to further boost their acceptance throughout the business.
North America dominated the global market, claiming a market share of 40% by 2020. The presence of several companies, such as Microsoft Corp., Oracle Corp., Amazon.com Inc., and International Business Machines Corp. and the greater tendency to embrace new technologies are expected to keep this region in the market. Within the U.S., companies place the most significant importance on digital transformation and are often deemed among the early adopters of new technologies such as IoT and additive manufacturing. Related industries are big data analytics, Artificial Intelligence (AI), machine learning, AR, and VR and the most recent telecommunications technologies, like 5G, 4G and LTE. The ongoing adoption of the most advanced technologies by companies within the U.S. bodes well for the development of the market for cloud computing.
The Asia Pacific is anticipated to be the fastest-growing area in the coming years. The rapid expansion in China and India and the rise of regional players like Alibaba Group positively impact the growth of regional markets. In addition, to satisfy the needs of data sovereignty of the government, hyper-scale cloud companies like Microsoft Corp. and Google LLP have begun to establish data centres in various markets like Indonesia and Thailand. In addition, there is the creation of the Asia Cloud Computing Association, which is a forum that is with its headquarters within the APAC region, which includes the participation of Cisco Systems, EMC Corporation, Microsoft, Alcatel-Lucent, NetApp, Rackspace, REACH, Telenor, Nokia Siemens Networks, Verizon, and PLDT/Smart will likely to accelerate the development of the market.
Key Companies & Market Share Insights
Partnerships, strategic mergers and acquisitions are expected as the best and most efficient options for businesses to gain access to emerging markets and improve their technological capabilities. In October, for instance, 2020, International Business Machines Corporation announced plans to expand its hybrid cloud strategy and execute a spin-off of its industry-leading managed infrastructure services division. This will allow the company to focus on expanding its business strategies. As of July 20, 2020, Adobe Inc., International Business Machines Corporation, and Red Hat, Inc. joined forces to improve data security in real-time and speed up digital transformation for businesses, with specific attention to industries with strict regulations. The collaboration was aimed at aiding enterprises in providing an enhanced experience for customers throughout the customer journey, increasing the level of engagement, increasing loyalty, and increasing profit.
In addition, product differentiation, enhancements, and the expansion of services are expected to clear the way for the expansion of businesses in the market. In June 2021, Alibaba Cloud announced the expansion of its services into Asia with the launch of its first-ever data centres in the Philippines. Its new facility has helped Alibaba Cloud expand its services and gain an edge in the marketplace. In addition, the emergence of the popularity of the startup scene and the rise of transport analytics startups like Databricks, Uptake Technologies Inc., Rubrik, D2iQ, Inc., Vlocity Inc., Confluent Inc., Stratoscale, and Security Scorecard, are expected to intensify competition on the market. Some of the most well-known companies in the global market for cloud computing include:
- Adobe Inc.
- Alibaba Group Holding Ltd.
- Amazon.com Inc.
- Google LLC
- International Business Machines Corporation
- Microsoft Corporation
- Oracle Corporation
- Salesforce.com Inc.
- SAP SE
- Workday, Inc.
Cloud Computing Market Report Scope
|Market size value in 2021||USD 368.97 billion|
|Revenue forecast in 2028||USD 1,251.09 billion|
|Growth rate||CAGR of 19.1% from 2022 to 2030|
|Base year for estimation||2020|
|Quantitative units||Revenue in USD billion and CAGR from 2022 to 2030|
|Report coverage||Revenue forecast, company ranking, competitive landscape, growth factors, and trends|
|Segments covered||Service, deployment, enterprise size, end use, region|
|Regional scope||North America; Europe; Asia Pacific; Latin America; MEA|
|Country scope||U.S.; Canada; U.K.; Germany; China; India; Japan; Brazil; Mexico|
|Key companies profiled||Adobe Inc.; Accenture, Alibaba Group Holding Ltd.; Amazon.com Inc.; Google LLC; International Business Machines Corp.; Microsoft Corp.; Oracle Corporation; Salesforce.com Inc.; SAP SE; Workday, Inc.|
|Customization scope||Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional, and segment scope.|
|Pricing and purchase options||Avail customized purchase options to meet your exact research needs.|
Segments Covered in the Report
The report predicts growth in revenue at regional, global and national levels. It also analyses the most recent trends across all sub-segments between 2018 and 2028. To do this research, Grand View Research has divided the global market for cloud computing in this report based on deployment, service, enterprise size, the end-user and location:
- Service Outlook
- Infrastructure as a Service (IaaS)
- Platform as a Service (PaaS)
- Software as a Service (SaaS)
- Deployment Outlook
- Enterprise Size Outlook
- Large Enterprises
- Small & Medium Enterprises
- End-use Outlook
- IT & Telecom
- Retail & Consumer Goods
- Energy & Utilities
- Media & Entertainment
- Government & Public Sector
- North America
- The Netherlands
- Czech Republic
- Rest of Europe
- Asia Pacific
- South Korea
- Australia & New Zealand
- Rest of Asia Pacific
- South America
- Rest of South America
- The Middle East & Africa
- Saudi Arabia
- South Africa
- Northern Africa
- Rest of MEA