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The global cloud storage market size stood at USD 49.13 billion in 2019 and is projected to reach USD 297.54 billion by 2027, exhibiting a CAGR of 25.3% during the forecast period.
The global market is estimated to grow at a fascinating CAGR of 25.3%. According to the Cisco Global Cloud Index forecast 2015-2020, 92% of the business workloads are likely to be processed on cloud data centers. This shows that the market is expected to have unprecedented growth in the coming years. Analytics, mobility, and social media are observed to be the striking the cloud storage market trends.
The global market is expected to show an exponential growth driven by the outbreak of COVID-19. For example, Xiang Hu Bao, Alipay’s online mutual aid platform, leverages blockchain to fast-track the insurance claims, reduce fraud cases, and fasten settlements. This demands advanced storage capacities. Also, the spread of novel Coronavirus has lead to the generation of large volumes of patient databases globally. However, cloud storage is expected to see a considerable decline in the market during 2020 and 2021 owing to the reduced cloud infrastructure spending. As a result, the healthcare and life sciences industries are estimated to exhibit a remarkable growth rate.
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The Global Market to Witness a Quantum Leap from Analytics, Mobility, and Social Media
Cloud analytics has given new opportunities to the market players in the sectors where users require analytical insights for decision making. Considering the massive computing power, the requirement for additional storage to support the big volumes of data is increasing exponentially. Enterprises are leveraging cloud storage platforms and delivering advance storage technologies with more accessibility and flexibility. Similarly, social media analytics has influenced the end-users to adopt automated storage services to offer real-time enhanced customer experience. These technological trends are likely to boost the market value.
Enterprises Adopting Hybrid-cloud as a Smart Strategy
With the growing adoption of analytics-driven platforms, businesses are generating large amount of data. By recognizing the limitations of traditional storage practices, the enterprises are switching to cloud storage. They are likely to be more inclined towards hybrid cloud solutions. These solutions leverage enhanced capacity, accessibility, and economic savings as compared to the traditional storage systems. Owing to these factors, the adoption of hybrid-cloud deployment is set to be a growing market trend.
The Spread of Novel Coronavirus to Drive the Demand for Cloud Storage
As the workforces are shifting towards a distributed work environment, cloud-based solutions are empowering the workforce to collaborate and stay connected. To enable the organizations to securely manage the data and support remote working in the COVID-19 pandemic situation, Microsoft Corporation is offering extended Microsoft Azure cloud credits, increased Windows benefits, and other services. This offer is limited to critical care and non-profit organizations such as health support, public safety, food and nutrition, and others. Similarly, Amazon and Salesforce have teamed up to provide cloud-based contact center services to the customers under the challenging circumstances of the pandemic. Such active initiatives are anticipated to drive the cloud storage adoption in the coming years.
Exponential Growth in the Data Volumes is Driving New Storage Capacity Requirements
The advent of remote sensing technologies, Internet of Things (IoT), and advanced video systems such as 4K resolution cameras has led to the generation of high capacity data. As a result, there is growing demand for cloud storage technologies and networking. Additionally, machine learning and autonomous systems such as autonomous vehicles are likely to drive the adoption of cloud computing services including data storage. A distributed ledger, cryptocurrency, and other distributed systems are driving the demand for cloud storage models.
Mandatory Government Laws and Legal Obligations to Restrict the Market Growth
Data privacy and confidentiality are the most essential elements of the cloud storage ecosystem. Mandatory rules and laws imposed by the governments on using cloud services and other legal obligations are likely to limit the cloud storage market growth. For instance, the government of India has made a provision in the Information Technology Act 2000, that any unlawful act regarding the computing models/transactions containing confidential information will be subjected to punishment. Such regulations and laws imposed by the governments across the world are projected to act as a barrier for the growth of the market. Also, data breaches are likely to pose a threat to the service providers which may restrict the market growth.
Increasing Demand for Storage Models to Augment Growth of This Segment
By component, the market is divided into storage models and services. The storage model segment is projected to hold a major market share. Mainly, there are three categories of storage models offered by the market players including object storage, file storage, and block storage. Each of the storage model offers its own advantages and use cases.
Storage models cater to the fundamental requirements of enterprises such as data security, availability, and durability. Businesses leverage the storage models for data backup and recovery, software testing and development, cloud data migration, compliance, and other big data applications. These factors are driving the adoption of storage models across businesses. Whereas, services play an essential role in this market and this segment is projected to exhibit significant growth in the coming years.
Block Storage Model Segment to Generate Maximum Revenue
By storage model, the market is classified into object storage, file storage, and block storage. The block storage segment is expected to hold a major share. The file storage segment is forecasted to show a higher growth rate.
Object storage refers to the management of data as objects. The applications developed in the cloud leverage object storage owing to its metadata characteristics and vast scalability. For example, Amazon.com, Inc. offers object storage solutions such as simple storage services (S3). This solution enables the enterprises to build advanced applications and import the existing stored data for analytics, backup, or archive. Object storage allows enterprises to optimize storage resources in a cost-optimized way. These factors are driving the demand for the object storage model across the organizations.
The file storage model includes data in the hierarchical file and folder structure. File storage is mostly used for home directories, development platforms, and data storage for audio, video, and other files. IBM Corporation provides IBM Cloud file storage. The solution allows the users to customize and deploy flash-backed and Network File System (NFS)-based file storage with an extended storage capacity. Increasing storage capacity is likely to enable the enterprises to adjust the demand for workload.
Block storage is defined as that form of data storage wherein files are stored in the form of even blocks. Block storage is generally used in the storage area network (SAN) environment. Enterprises leverage block storage models to access and modify the frequently changing data such as ERP systems. Block storage is more complex and expensive, but the specific block data can be accessed without compromising the entire operating system performance. Rackspace Inc. provides block storage solution that is powered by OpenStack, an open standard cloud computing platform.
Managed Service Providers are Looking towards Cloud Storage Services as a Revenue Opportunity
By services, the market is segmented into professional services and managed services. The professional services segment is expected to seize a significant market share. Professional services including consulting, training and education, and support and maintenance provided by the market players enable the enterprises to achieve their business objectives. For instance, Hewlett Packard Enterprise Development LP provides professional services including cloud consulting services, Artificial intelligence and data services, education, and management of change services.
Whereas, the managed services segment is estimated to exhibit a higher growth rate. Managed services help organizations to optimize operational costs and risks. For example, Amazon.com, Inc. offers managed services that enable enterprises to automate their activities such as security and backup services, change requests, and monitoring.
These services empower the organizations to improve security and compliance, facilitate migration to the cloud, and speeds up the IT processes. Increasing volumes of unstructured data and general data protection regulation (GDPR) requirements are driving the need for storage management. As a result, managed service providers (MSPs) are looking forward to the managed cloud storage services as an expanding revenue opportunity.
Hybrid Cloud Deployment to Boost the Adoption of Cloud-native Applications
Based on deployment type, the market is classified into private cloud, public cloud, and hybrid cloud. Among these types, the public cloud segment is expected to account for a major market share. The most adopted way of implementing cloud computing services are public clouds. The cloud infrastructure such as storage and servers are operated and owned by a third-party cloud service provider (CSP) and delivered over the Internet.
For instance, Microsoft Corporation’s Microsoft Azure and Google Inc.’s App Engine are some of the examples of public cloud storage. Public cloud deployments are usually used to provide online office applications, web-based emails, storage and development, and testing applications. These deployments provide low costs and maintenance, on-demand resources and high reliability. These factors contribute to the implementation of public cloud deployments across the enterprises.
Private cloud deployments comprise computing resources that are exclusively leveraged by only one organization. In private cloud deployments, the services are provided on a private network and the hardware and software are dedicated completely to an organization, unlike the public cloud. VMware, Inc. provides a dedicated private cloud solution. This solution empowers businesses with consistent data management, intelligent operations, and automation. The private cloud segment is forecasted to exhibit a moderate growth till 2027.
The hybrid cloud segment is anticipated to showcase a fascinating CAGR during the forecast period. These deployments encompass the capabilities of both public and private clouds. Enterprises leveraging hybrid cloud deployments can gain the benefits of both the cloud deployments. For instance, businesses can use public clouds for low-security needs and high volumes of data. Whereas, private cloud is primarily used for business-critical infrastructure data such as financial operations. This is a significant factor to drive the adoption of hybrid cloud. Dell, Inc. provides hybrid cloud and automated infrastructure integrated with the VMware cloud foundation. These solutions offer a complete storage portfolio, data protection, financial services, and deployment.
Small and Mid-Sized Enterprises Segment to Exhibit a Remarkable Growth Rate
Based on enterprise size, the market is bifurcated into large enterprises and small & mid-sized enterprises (SMEs). The large enterprises segment is expected to account for a major market share attributed to the availability of IT infrastructure, substantial technological investments, and digitization adoption. The small and mid-sized enterprises segment is projected to exhibit a higher growth rate in the coming years. The advent of advanced cloud storage capacities has enabled the small and-mid sized enterprises to optimize the spending on data computing infrastructure. Cloud storage is an emerging technology among the SMEs. Hence, it provides more opportunities to drive the market growth. However, due to the outbreak of the COVID-19 pandemic, the SME's are likely to limit their tech budgets for the period.
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Spread of Novel Coronavirus to Drive the Demand for Cloud Storage in BFSI and IT and Telecom Industry
By vertical, this market is categorized into banking, financial services and insurance (BFSI), IT and telecommunication, government and public sector, manufacturing, healthcare, and life science, retail and consumer goods, media and entertainment, and others. The other segment comprises of verticals such as energy and utilities, chemical, and travel and hospitality.
The BFSI industry poses large volumes of consumer data and tends to provide efficient services to the customers. Hence, cloud computing technology is likely to serve as a transformative digital solution that offers a high level of data security, agility, and scalability to this industry. These cloud computing capabilities boost the operational efficiency, as well as improve revenues and customer experience of the organization. These factors are driving the demand for these models across the industries.
The IT and telecommunication segment is forecasted to account for the maximum market share. The surging demand for over-the-top services (OTT) and other digital natives have influenced the Telecomm Services Providers (TSP) to invest in core cloud services. Similarly, the adoption of unified communication services such as web conferences, broadcasting, and others is generating a substantial amount of data which is leading in the high demand for advanced storage solutions. The spread of COVID-19 pandemic is further projected to increase the demand for these platforms in 2020 and 2021.
Furthermore, the healthcare and life sciences industry segment is expected to exhibit a remarkable growth rate. Integrated cloud services and solutions incorporated with digital technology makes the medicine and research domain more precise and focused. Cloud services enable healthcare providers to achieve real-time data insights and reduce IT complexities with precise data storage solutions. These are some of the factors that are driving the adoption of cloud storage in the healthcare and life sciences industry.
Similarly, other industries such as manufacturing, government, and public sector are the potential users of storage platforms. For instance, according to the State of Manufacturing Report 2017, 90% of the manufacturing companies leveraged cloud-based productivity applications. This data illustrates that cloud computing is virtually transforming the manufacturing industry which would drive the demand for solutions to digitally store data.
Industries such as retail and consumer goods, media and entertainment, and energy and utilities are projected to drive the adoption of storage deployments in the coming years. This adoption is attributed to the growing digitization of service and investments in advanced technologies such as IoT, artificial intelligence, and big data. The advent of analytics-driven customer experience platforms has influenced the adoption of data storage solutions across the industries.
North America Cloud Storage Market Size, 2019 (USD Billion)
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Asia Pacific to Exhibit a Remarkable Growth Rate during the Forecast Period
The market has been divided into five major regions including North America, Europe, Asia Pacific, the Middle East and Africa, and Latin America. The regions are further divided into countries. North America is anticipated to emerge dominant in the global market. Asia Pacific is expected to exhibit a high growth rate.
North America is forecasted to dominate the market throughout the forecast period. In 2019, the region generated USD 19.85 billion in terms of revenue. According to Cisco's regional cloud traffic trends, it is estimated to generate the highest cloud traffic among the other regions. The United States holds the major market share attributed to the significant adoption of e-commerce, electronic signatures, cybercrimes, and other digital services that generate heaps of data each day. Canada is expected to show a notable growth rate. However, the outbreak of COVID-19 is likely to impact the long-term investments and technological spendings of enterprises across the region. The North American countries being a mature market ensure to continue the use of these storage services.
Asia Pacific is expected to showcase a remarkable growth rate during the forecast period. The developing economies such as India and China have made significant contributions in facilitating the region's adoption of cloud-driven technologies. For instance, according to GSMA Intelligence 2018, there is 67% mobile social media penetration and 61% online service index score for e-government. The growing penetration of smartphones exhibits a shift towards digitization. Owing to these growing digitization trends, businesses are turning towards cloud-based data analytics to identify customer behavior. All of these would lead to an increase in data consumption and generation which would further drive the demand for storage.
Furthermore, according to an article published by Eurostat, the statistical office of the European Union, 26% of the European Union enterprises leveraged cloud computing in 2018 for storing files in electronic form and hosting the email-services. The report also states that about 18% of the enterprises used the public cloud, whereas, 11% of the enterprises were using the private cloud for their exclusive infrastructure usage in 2018. The statistics exhibit that cloud services are already adopted by enterprises across the region and hence, the region is expected to exhibit moderate market growth in the coming years.
The Middle East and Africa is anticipated to have a potential market growth during the forecast period. According to the Cisco Cloud Index 2015-2020, the region is expected to show the highest cloud traffic growth rate of approximately about 41% CAGR. The rapid growth is attributed to the rising migration towards cloud architecture due to its ability to replace traditional data centers and manage more workloads. According to a report published by MENA Cloud Alliance in 2017, Saudi Arabia is forecasted to spend USD 239.4 million on cloud services by 2019. However, the outbreak of novel Coronavirus is expected to limit these spending.
Latin America is projected to exhibit a steady growth. According to the Cisco Digital Readiness report 2018, the Latin American countries such as Brazil, Mexico, and Argentina are at the middle stage of digital readiness. Digital readiness refers to the technology adoption, technology infrastructure, as well as investments of business and government among other components. This data illustrates that the market in the region is probably at a nascent stage and hence, poses lucrative business opportunities for the market players in the future.
VMware, Inc. Continues to Invest in Key Growth Products and Enter into Strategic Partnerships to Drive Innovation
VMware, Inc. continues to invest in key growth products including vSAN, and NSX, and other products which are will be the significant growth drivers in the future. In terms of sales and marketing strategy, the company has leveraged go-to-market strategy including direct sales force that includes a specialist sales force for the company’s key growth products and other channel partners.
Key Market Players to Enhance their Product Offerings and Adopt Partnership Strategies to Achieve Organizational Goals
Being a fragmented market, the key market players such as Amazon.com, Inc., IBM Corporation, and Dell, Inc., and Microsoft Corporation are likely to expand their product offerings. By expanding the product line, they would ensure to increase the revenue or market share. Also, it is likely to enable them to take advantage of the market opportunities across different sectors. Strategic partnerships are likely to promote the business expansion of market players. For instance,
The market report highlights the leading regions across the world to offer a better understanding of the user. Furthermore, the report provides insights into the latest cloud storage industry trends and analyzes technologies that are being deployed at a rapid pace at the global level. The report examines various paradigm shifts associated with the transformation of software. It further highlights some of the growth-stimulating factors and restraints, helping the reader to gain in-depth knowledge about the market.
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2016 - 2027
2020 - 2027
2016 - 2018
Value (USD billion)
By Enterprise Size
Fortune Business Insights says that the market was valued at USD 49.13 billion in 2019.
Fortune Business Insights says that the market is expected to reach USD 297.54 billion by 2027.
A growth of 25.3% CAGR will be observed in the market during the forecast period (2020-2027)
Within the vertical segment, the BFSI and IT & telecom industries are expected to lead during the forecast period.
Growing adoption of cloud computing, analytics-driven platforms and big data analytics are some of the factors that are driving the market growth.
Amazon web services, Inc., VMware, Inc., IBM Corporation, Microsoft Corporation, and Dell, Inc. are some of the top companies in the market.
North America is expected to hold a major share. Presence of key players in the region is likely to boost the market growth.
North America accounted for USD 19.85 billion in 2019.
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