Cloud Computing market was estimated to be USD 292.2 Billion in 2020 and is expected to witness a high CAGR of 23.6% during the forecast period (2020-2028). It is due to the increasing use of intelligent devices and the internet coupled with the high consumption of big data. Covid-19 also positively impacts the market growth as most businesses, managers, and employees opt for remote working that fuels the cloud computing market size.
Introduction of the Cloud Computing Market
Cloud computing is meant to deliver on-demand computing services via the internet computing power on a pay-as-you-go basis, ranging from applications to storage. However, individuals can use technology services like computing power, databases, and storage through cloud producers like AWS (Amazon Web Services) and other multiple growing enterprises instead of buying and maintaining physical data centers and servers.
Key Players of the Market
Cloud Computing Market Dynamics
The significant factors such as rapid digitization across various industries, rising in operating smart devices, and the internet across the globe coupled with the rising consumption of big data is fueling the market growth. Moreover, the augmented use of the Internet of Things (IoT), cloud computing, 5g, and real-time analytics by Machine Learning and Artificial Intelligence will boost the implementation of cloud technology among large enterprises. Cloud computing technology provides various functions like networking power and storage processing by using AI and Natural Language Processing (NLP).
As per the World Economic Forum, advanced technologies like AI, IoT, and cloud computing are supported by the fourth industrial revolution. Therefore, with the help of these innovative technologies, companies among various industry verticals are integrating cloud computing. Furthermore, the growing adoption of Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), especially among the Small & Medium Enterprises (SMEs), is again surging the cloud market share. The government of developing and developed countries concentrates on implementing specific steps and programs to support innovative technologies in several industries such as BFSI, retail, consumer goods, and others.
Therefore, to promote these technologies worldwide, the UAE government has launched digital programs & initiatives, including the Fifth Generation – 5G, Smart Dubai, Digital Invoicing, and several different technology-related programs. This step will create opportunities for the cloud computing market demand in the upcoming years. The paradigm shift towards rapid digitalization and rising focus on providing better customer experiences further propel the demand for cloud computing services.
However, the outbreak of the COVID-19 played a crucial role in setting the work from home model by companies to ensure their employee’s health and manage operational competency. Hence, it has augmented the demand for Software-as-a-Service collaboration solutions. Due to this, individuals prefer to stay at home to maintain the social distance rule, which has increased the ideal time. This factor also encourages individuals to step ahead towards different streaming platforms like Apple TV, Hulu, Netflix, Amazon, YouTube, and Disney+, which boosts the demand for IaaS to capture the changing demand of the consumer. On the other high edge of the spectrum, the risk of critical data loss and the increasing cyber-attacks are the two significant factors restraining the cloud market.
Cloud Computing Market Segmentation
Service Model Segmentation Market Drivers
The Software as a Service (SaaS) segment speculates a higher CAGR during the forecast period. TIt is because of the high demand for Software as a Service (SaaS), particularly among the Small & Medium Enterprises (SMEs) at the global level. At present, SMEs are highly adopting SaaS products to avoid high capital costs and licensing fees. The SaaS is cost-effective generally resides in the multi-tenant environment, wherein the license cost of Software & hardware is less than the traditional model. Moreover, SaaS offerings decrease the time spent on installation, are easy to use, and offer scalability. All these features are contributing to the market growth.
Industry Verticals Segmentation Market Drivers
The BFSI segment witnesses its dominance in the market over the next six years. The growing focus on continuous digitization due to implementing several steps like Smart Dubai, the Fifth Generation-5G, and other projects, encouraging banks & financial institutions to increase adoption of cloud-based Software and solution to fulfill the customer’s expectations to sustain in the competitive market. Furthermore, the rising volume of data generated has augmented the demand for tools and solutions to keep and maintain consumers’ critical information like account holder’s personal details, transaction details, and debit & credit card details.
Organization Size Segmentation Market Drivers
The large enterprise segment is projected to witness a faster CAGR in the next few years. The augmenting demand for hybrid cloud, exclusively among the large enterprise from retail, government, logistics, education, oil & gas industry, and transportation, is a critical factor accelerating the market growth during the forecast period. Also, the biggest concerns of large organizations are data recovery and security. So, Large-scale enterprises require safe and reliable services to use their data. Thus, many large-scale companies adopt cloud solutions to secure their data and deploy big data analytics tools to give the best services to their end-users.
The North American region speculates to lead the market in the coming six years. Leading companies like Oracle, IBM Corporation, Microsoft Corporation, and others are crucial in increasing demand. The Asia-Pacific region is growing at a faster CAGR over the forecast period due to the substantial growth in India and China and the emergence of local players like Alibaba Group. Moreover, to capture the sovereignty need of the governments, large-scale cloud organizations such as Amazon Web Services (AWS) and Google are preparing to build new data centers in Thailand & Indonesia. All these consolidated aspects are surging the demand of the market in the next few years.
Global Cloud Computing Market Segmentation
Segmentation By Service Model
Segmentation By Deployment Model
Segmentation By Organization Size
Segmentation By Workload
Segmentation By Vertical
Segmentation by Region
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