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The global cloud computing market size was USD 193.60 billion in 2019 and is projected to reach USD 684.55 billion by 2027, exhibiting a CAGR of 17.6% during the forecast period.
The growth of the market is driven by the increasing adoption of innovative technologies such as machine learning (ML), artificial intelligence (AI), and the growing reliance of cloud-based solutions across industries. In addition, the rising investments in various cloud-based projects by countries such as the U.S., the U.K., China, and others are expected to drive the growth of the market. For instance, in the fiscal year 2019, the U.S. Federal Government invested around USD 5.91 billion in cloud solutions and other cloud migration & support services.
Proliferating Demand for Cloud-based Solutions amid COVID-19 Pandemic to Aid Growth
The recent coronavirus outbreak has impacted economies across the globe. Therefore, organizations across various industries are comprehensively dependent on IT-related services. Recently, there is a significant rise in the demand for live streaming platforms, such as Hulu, Netflix, Amazon, and others, as most of the workforce is operating from their homes owing to lockdown. This surge in video-on-demand (VoD) solutions has further increased the demand for IaaS cloud-based services amidst the COVID-19 pandemic.
Governments and organizations in many countries have adopted the ‘work from home’ strategy, owing to which, a rise in the demand for SaaS-based collaboration solutions has been observed. Key market players are focused on new product launches to expand their product portfolios.
Such active initiatives are expected to drive the demand for cloud-based solutions in the coming years.
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Substantial Adoption of Omni-cloud over Multi-cloud to Boost Growth
Large organizations are adopting multi-cloud solutions with an aim to organize their workloads across cloud-based platforms. However, as cloud-based applications such as Facebook, Dropbox, and Gmail, among others are becoming more portable and robust, the computation process cycle needs to be faster in real-time. As a result, enterprises are shifting their focus from multi-cloud solutions to Omni-cloud solutions to leverage various benefits such as secured data availability, effective decision making, ease of data use, and scalability in real-time.
Omni-cloud provides top-notch connectivity that allows multiple platforms to integrate and streamline data. The data deployment system is more organized and accessible with the Omni-cloud computing system. Key players are adopting various marketing strategies including mergers & acquisitions, new product launches, partnerships, and others to gain a competitive edge in the market.
Integration of AI and ML with Cloud Will Provide Impetus to Market
The rising adoption of artificial intelligence (AI) and machine learning (ML) technologies is changing the landscape of cloud solutions for monitoring, visualizing, and analyzing data-driven business strategies. The integration of these technologies with cloud solutions would allow enterprises to augment their visualization capabilities and make complex data usable and accessible over the visual representation. The adoption of ML and AI technologies has enabled the ease of data management and has reduced data storage complexities. In addition, these technologies would aid in improving business productivity, optimizing and accelerating decision-making processes, and lowering the business operating costs. Thus, the rising adoption of AI and ML is likely to drive the growth of the market.
Data Privacy and Information Security Concerns Associated with Cloud Computing to Impede Growth
Cloud users store their confidential information and data regarding business and official activities on the cloud-based platforms. However, privacy and security concerns about data breaches, data loss, application vulnerabilities, unforeseen emergencies, and cyber-attacks related to cloud-based solutions are expected to hinder the market growth. This can reduce the overall revenues in a number of areas such as IT and telecom, government, and BFSI, among others. According to the arXiv.org e-Print archive, in 2019, more than 60% of the business-related data and information on storage drives were insecurely held.
The authorization management, data encryption & integration, access control, and communication security, among others, are some of the cloud-based security services offered by the major cloud vendors to address data privacy and information security issues. For example, vendors such as Microsoft Corporation, Amazon.com Inc., and Google LLP offer 99.9% uptime, which relieves enterprises from the burden of maintaining and creating backup infrastructure and recovery facilities.
Public Cloud Segment to Dominate Owing to Rapid Digital Transformation
Based on the type, the cloud computing market is divided into hybrid cloud, private cloud, and public cloud. Among these, the hybrid cloud segment is likely to exhibit the maximum growth rate during the projected period. This is attributable to the increasing adoption of cloud-based solutions among SMEs to increase efficiency and reduce operational costs. In addition, the rising demand for secured, scalable, agile, and cost-efficient cloud computing solutions is expected to drive the demand for hybrid cloud across enterprises. The public cloud segment is expected to dominate the market in terms of share during the forecast period. The growth is attributable to the rapid digital transformation, rising penetration towards the internet and connected devices, and increasing automation among various verticals.
Rising Demand among Various Enterprises to Drive Software-as-a-Service (SaaS) Segment
Based on service, the market is divided into infrastructure as a service (IaaS), software as a service (SaaS), and platform as a service (PaaS).
Among these services, the software as a service (SaaS) segment held the largest cloud computing market share in 2019. This growth is owing to its cost-effectiveness, ease of deployment, less and maintenance charges. The infrastructure as a service (IaaS) segment is anticipated to exhibit the highest CAGR during the forecast period. The growth is attributable to the rising penetration of hybrid cloud platforms and increasing demand for storage & safety of business data across various verticals. In addition to this, the surging demand for hybrid cloud platforms and the adoption of cloud-based services such as IaaS and PaaS by various industry verticals is expected to boost the demand for these services.
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Higher Adoption of Cloud Computing Solutions to Propel IT and Telecommunications Segment
Based on industry, the market is segregated into banking, financial services, and insurance (BFSI), IT and telecommunications, government, consumer goods and retail, healthcare, manufacturing, and others.
Among these, the IT and telecommunications segment is expected to exhibit the dominant share during the forecast period. The growth is attributable to the rising adoption of cloud-based solutions for the storage and management of data. Factors such as secured storage, improved productivity & performance, among others have enabled the IT and telecom sector to further focus on the customer-centric digital transformation.
The healthcare segment is projected to grow at the highest CAGR during the forecast period. This growth is attributable to the rising adoption of cloud-based software, wearable devices, and big data analytics, among others by healthcare institutions. Other industries such as BFSI, retail, government, and others are expected to showcase significant CAGR, owing to the favorable regulatory laws & guidelines and the increasing government initiatives to support data integrity & safety.
North America Cloud Computing Market, 2019 (USD Billion)
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Geographically, the market is segmented across five major regions, namely, North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.
North America is expected to dominate the market in terms of revenue during the forecast period. The early adoption of advanced technologies and the presence of major key players such as Amazon Web Services, IBM Corporation, Apple Inc., and others are boosting the demand for cloud-based solutions across the U.S. and Canada.
Asia Pacific is expected to exhibit an exponential growth during the forecast period. The growth is attributable to the rising demand for cloud-based solutions to meet the increasing need for highly secure data across various industries. Also, the rising internet penetration and surging digitalization are likely to drive the cloud computing industry growth in this region.
Europe is expected to showcase a substantial CAGR during the forecast period. The growth is attributable to the rising e-commerce industry, supportive government regulatory environment, and increasing spending on cloud-based technologies. The Middle East & Africa and Latin America are likely to exhibit a gradual CAGR throughout the forthcoming year backed by rising investments by the local government to adopt advanced technologies such as 5G, artificial intelligence (AI), machine learning (ML), cloud, and others.
Emphasis of Key Players towards Developing Innovative Cloud Computing Solutions to Strengthen Competition
Major players such as Amazon Web Services, Microsoft Corporation, Oracle Corporation, Alibaba Group Holding Limited, and IBM Corporation are proactively strengthening their positions by upgrading their existing product lines. These players offer a suite of cloud computing services such as Google Cloud Platform (GCP), Microsoft Azure, and AWS Cloud, among others. In addition to that, they are now deploying cloud-based solutions with advanced technologies such as AI, ML, and others to augment their products and deliver enhanced solutions.
An Infographic Representation of Cloud Computing Market
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The cloud computing market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, 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 advanced market over recent years.
2016 – 2027
2020 – 2027
2016 – 2018
Value (USD billion)
Fortune Business Insights says that the market stood at USD 193.60 billion in 2019.
By 2027, the market size is expected to reach USD 684.55 billion
The market is expected to grow at a CAGR of 17.6% in the forecast period (2020-2027).
Within type, the public cloud segment is expected to lead the global market in terms of share during the forecast period.
The increasing integration of artificial intelligence (AI) and machine learning (ML) technologies with the cloud is one of the key market drivers
Amazon Web Services (AWS), Alibaba Group Holding Limited, IBM Corporation, Microsoft Corporation, and others are the top companies in the market
The IT and telecommunications segment holds the major market share.
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