Cloud Microservices Market Size, Share & COVID-19 Impact Analysis, By Component (Platform and Services), By Deployment Mode (Public, Private, and Hybrid), By Enterprise Type (Large Enterprises and SMEs), By End-User (IT and Telecommunications, BFSI, Retail and Consumer Goods, Healthcare, Education, Media and Entertainment, and Others), and Regional Forecast, 2023-2030

The global cloud microservices market size was valued at USD 1.29 billion in 2022 and is projected to grow from USD 1.54 billion in 2023 to USD 6.04 billion by 2030, exhibiting a CAGR of 21.6% during the forecast period (2023-2030). North America accounted for a market value of USD 0.61 billion in 2022. Microservices is a methodology for developing applications that are built on modular components or services. Each module is intended to support specific tasks or business objectives, using a direct and easily defined interface such as an Application Programming Interface (API) that refers to other sets of services. The microservices model enables a more decentralized approach to software development for developers.

The cloud microservices market growth can be attributed to several factors, such as the proliferation of microservices architecture, the rising need for secure, low-cost IT operations, and the growing recognition of containers and DevOps tools. With faster development cycles, scalable and agile systems, and improved productivity with reduced costs, the widespread adoption of microservices is helping organizations to streamline their web application development processes. In addition, there is considerable market potential for developing business strategies through partnerships and collaboration amongst the key players in the market. For instance,

• In April 2023, Sensedia, the world's largest supplier of API and microservices launched SPIN, a Global Partner Programme for technology, service, and distribution channel organizations seeking to extend their offer and opportunities.

COVID-19 IMPACT

Faster Pace of Cloud-Based Digital Transformation amid COVID-19 Pandemic Increased Adoption of Cloud Microservices

The spread of COVID-19 had a devastating effect on the global economy, as quarantine measures were put in place to control its spread. Companies recognized the limitations and difficulties of their current environments due to the impact of the pandemic on their businesses. COVID-19 accelerated cloud adoption not only as a technological change but also as an operational model. For instance,

• According to O’Reilly’s Microservices Adoption in 2020, the success rate for the adoption of Microservices among enterprises was 92%.

To cope with the extraordinary growth in remote employees, enterprises are working toward a faster pace of cloud-based digital transformation that allows them to respond quickly to evolving market conditions. They were deploying cloud microservices to ensure business continuity during the crisis. For instance, according to Trading Platforms, Microsoft Teams which is based on microservices architecture saw an increase of 93% in daily active users in 2021 compared to 2020.

Due to such an increase in cloud-based services for digitalization during COVID-19 pandemic, there has been an enormous need for microservices.

LATEST TRENDS

Adoption of Service Meshes and Serverless Architecture for Managing Microservices is a Key Trend

Service meshes have become more common in managing the complexity of microservices. A service mesh is a layer of specialized infrastructure within the microservices architecture, which serves to communicate between services. The use of service meshes has become more popular as the complexity of microservices architectures continues to sure in businesses.

As most of the infrastructure is managed by a communication service provider, organizations can provide innovations. This model requires that organizations pay only for the resources they use. AWS Lambda is an instance of serverless architecture and is being deployed by many organizations. Developers can build, deploy, and run small, independent, and autonomous services using serverless architecture and microservices, making it simple for the cloud provider to scale and manage them.

Thus, the aforementioned factors are expected to be a trend over the forecast period.

CLOUD MICROSERVICES MARKET GROWTH FACTORS

Rise of Microservices Architecture by Enterprises for Eliminating Complexity to Enhance Market Growth

Microservices architecture has become a popular way to develop software applications among organizations. The microservices architecture consists in breaking an application down into smaller, independent services that are capable of developing, deploying, and scaling on their own instead of building monolithic applications.

Many companies have adopted microservices architecture and are making progress toward a multi cloud strategy, as they continue to rely on cloud solutions. This approach allows businesses to adapt their technology stack in ways that suit their specific needs, and this is often more cost effective than relying on a single cloud provider. For instance,

• According to a recent Solo.io survey in 2022, 85% of organizations are moving their applications to microservices architecture, and this rapid growth and adoption help to make microservices mainstream.

Thus, the aforementioned factors act as driving forces for the growth of the market.

RESTRAINING FACTORS

Lack of Security for Sensitive Data to Hamper Market Growth

Professionals have their business-sensitive and personal data on cloud-based platforms. Therefore, the safety of professionals in this field is still a major concern. The data from microservices can be deployed and distributed through multi cloud environments, leading to a significantly larger attack surface area. With the loss of visibility and control over application components, it has become difficult for organizations to maintain users' data integrity, safety, and confidentiality in this setup. For instance,

• August 2021: Cloud Security Alliance (CSA), a firm that provides a protected cloud computing infrastructure, announced that it is publishing its pattern of microservices architecture. The document describes the key elements of the Microservices Architecture Pattern to create a vendor unbiased reference architecture framework that can be fragmented into software architecture patterns.

Thus, lack of security of data restricts the market growth.

SEGMENTATION

By Component Analysis

Rising Need for Scalable Environment to Increase the Demand for Services

Based on component, the market is segmented into platform and services. The services segment is estimated to grow at a higher CAGR during the forecast period. Cloud microservices provide better control of resources and computing power, making it possible for users to scale each service on an independent basis according to their needs. The microservices architecture allows organizations to build more than independent services, in addition to establishing teams supporting each service and implementing a DevOps approach.

Key players have incorporated best practices to create scalable solutions and are helping companies with consulting services to implement those best practices. Users can create an adoption plan for microservices through consulting services. To migrate toward the microservices architecture, this roadmap allows them to select services based on their criticality.

By Deployment Mode Analysis

Cost Effective Strategies used in Hybrid Cloud Applications to Gain Traction in the Market

Based on deployment mode, the market is segmented into public, private, and hybrid.

The hybrid segment is expected to grow at a higher growth rate during the forecast period. The growth is accredited due to the rising adoption of hybrid cloud across various end users. With a hybrid cloud, they can experiment with new products and business models more easily. The workload in the data center has grown as IT played a bigger role. It is costly to invest in the upgrading of computers and storage, but hybrid cloud applications can be cost-effective while driving cloud microservices market growth.

Also, to help tackle recurring business problems, organizations are increasingly using the hybrid cloud as a mainstream solution and deploying enterprise workload in production.

In a survey conducted by Microsoft in January 2022, 86% of respondents in the U.S. plan to increase their investment in hybrid cloud and multi cloud.

By Enterprise Type Analysis

High Demand of Cloud Microservices Consumption Model in SMEs to Aid Market Expansion

As per enterprise type, the market is bifurcated into large enterprises and SMEs.

The SMEs segment is expected to significantly grow at a higher CAGR during the forecast period. SMEs are widely adopting the on-demand microservices consumption model which has transformed the IT landscape. The cost effectiveness, availability and mutability of cloud microservices make them an attractive option to SMEs with low budgets and non-conventional IT infrastructures. Moreover, investments in scalable application development are also boosting the cloud microservices platform demand. For instance,

• In August 2021, Elopage, a rapidly rising Software as a service (SaaS) platform and payment provider for entrepreneurs, enterprise businesses, inventors, and SMEs, announced that it completed its funding round of (USD 34.6 million), which enables them to be empowered at all stages of growth. This funding provides support to its all-in-one microservices platform for entrepreneurs.

By End-User Analysis

Rapid Deployment of Automation Services by Cloud Microservices in Healthcare to Grow Market Share

Based on end-user, the market is categorized into BFSI, IT and telecommunications, retail and consumer goods, education, healthcare, media and entertainment, and others, which are adopting cloud microservices for improving their business.

The healthcare segment is expected to grow at the highest CAGR during the forecast period. The healthcare segment is largely driven by increasing demand for automation that enables rapid deployment of services. Moreover, the significant expansion of cloud microservices in healthcare is due to several advantages that contribute to reducing process complexity and the need for improved health service functionality. Additionally, companies are partnering to deliver the latest cloud native technologies. For instance,

• October 2022 - Capgemini announced a partnership with Microsoft to deliver a serverless and cloud native Azure based digital twin platform known as ReflectIoD. Also, it helps transform an organization's operational efficiency and maintenance effectiveness.

Thus, the rise in adoption of cloud, digital technology, and smart solutions in healthcare fuels the market growth.

REGIONAL INSIGHTS

Regionally, this market is studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

As per the analysis, North America held a major cloud microservices market share due to the presence of key players in the region adopting advanced technologies. In addition, growing demand from North American companies is due in part to their adoption of microservices architecture within BFSI, E-commerce, and I.T. It helps save costs, increase flexibility, efficiency, and scalability in the storage of information and data. In June 2022, Canadian company Telus acquired Digital and in Person Health Company Lifeworks for USD 1.77 billion, to strengthen its position as an employer based health service provider for cloud native applications.

Asia Pacific is expected to grow exponentially, with a strong demand for greater resilience and adaptability among businesses that could promote the adoption of cloud computing in the region. Across the region, to achieve real business value and resilience at a time of dynamic operating environments and distributed staff, customers are looking beyond their traditional digital transformation efforts toward cloud innovation as an internal strategy. Developing economies, such as India, Japan, and China, have made significant contributions in aiding the region's adoption of cloud microservices platform. For instance,

• May 2023 - By 2030, Amazon Web Services announced that it would invest USD 12.7 billion in cloud frameworks in India. It is intended to grow the demand for cloud services in the country.

KEY INDUSTRY PLAYERS

Market Players Announce Merger & Acquisition Strategies to Expand Reach

Prominent players operating in the global market focus on expanding their market share and global presence through merger & acquisition strategies. These companies focus on acquiring small and local firms to expand their business presence. Moreover, strategic partnerships and leading investments in cloud native technologies help increase the demand. Major players are adopting cloud decision frameworks and including best practices for cloud operations, which are leading them to scale up faster.

List of Key Companies Profiled in Cloud Microservices Market:

• Amazon Web Services, Inc. (U.S.)


• Microsoft Corporation (U.S.)


• IBM Corporation (U.S.)


• Salesforce Inc. (U.S.)


• F5, Inc (U.S.)


• Broadcom (U.S.)


• Software AG (Germany)


• Ksolves India Limited (India)


• Datadog (U.S.)


• WeaveWorks (U.K.)

KEY INDUSTRY DEVELOPMENTS:

• May 2023: Broadleaf Commerce partnered with Emax Electronics, a company of MEA retail giant Landmark Retail, for its e-commerce microservices. The Broadleaf Commerce platform was chosen by Landmark Retail for its API-first, Microservice-based, Headless, and Cloud native solution, which manages the complexities of the business using a single codebase and back-office administrative console.


• May 2023: F5, Inc. announced the ability to easily extend application and security services to one or more public cloud, hybrid deployment, native environment, Kubernetes and edge sites through multi cloud networking. At both the network and application levels, F5 distributed cloud services differ in connectivity and security.


• October 2022: Nextuple, a pioneer of omnichannel fulfillment transformation, launched the Nextuple Fulfillment Studio, a microservices composable system that enables retailers to rapidly and precisely configure and scale omnidirectional fulfillment capabilities. This also enables them to delight customers and strengthen their market position.


• March 2022: Weaveworks announced that GitOps 2022.03 is now available for the automated delivery of trustworthy applications and security operations. This solution is intended to facilitate the deployment and management of Kubernetes clusters and applications at scale for enterprises.


• February 2022: UST, one of the leading digital transformation solution providers, signed a multiyear Strategic Collaboration Agreement with Amazon Web Services, Inc. Under this Agreement, UST invested in developing deep AWS and digital enterprise transformation expertise to build industry domain centric microservices solutions for healthcare, financial services, and telecommunications.

REPORT COVERAGE

The cloud microservices market report provides a detailed market analysis. It focuses on key aspects such as leading companies, software types, and leading software and services applications. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market in recent years.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019-2030
Base Year	2022
Estimated Year	2023
Forecast Period	2023-2030
Historical Period	2019-2021
Growth Rate	CAGR of 21.6% from 2023 to 2030
Unit	Value (USD Billion)
Segmentation	By Component, Deployment Mode, Enterprise Type, End-User, and Region
By Component	Platform Services Consulting Services Integration Services Training, Support, and Maintenance Services
By Deployment Mode	Public Private Hybrid
By Enterprise Type	Large Enterprises SMEs
By End-User	IT and Telecommunications BFSI Retail and Consumer Goods Healthcare Education Media and Entertainment Others (Manufacturing)
By Region	North America (Component, Deployment Mode, Enterprise Type, End-User, Country) U.S. Canada Mexico South America (Component, Deployment Mode, Enterprise Type, End-User, Country) Brazil Argentina Rest of South America Europe (Component, Deployment Mode, Enterprise Type, End-User, Country) U.K. Germany Italy France Russia Spain Benelux Nordics Rest of Europe Middle East & Africa (Component, Deployment Mode, Enterprise Type, End-User, Country) Turkey Israel GCC North Africa South Africa Rest of Middle East & Africa Asia Pacific (Component, Deployment Mode, Enterprise Type, End-User, Country) China India Japan South Korea ASEAN Oceania Rest of Asia Pacific