Cloud Computing Market Analysis North America, APAC, Europe, South America, Middle East and Africa - US, Canada, China, UK, Germany - Size and Forecast 2023-2027

Cloud Computing Market Forecast 2023-2027

The global cloud computing market is expected to reach a value of USD 780.91 billion in 2027 with a CAGR of 17.32% between 2022 and 2027. The adoption is driven by factors such as cost savings, scalability, and flexibility for businesses. In this model, IT services are delivered over the Internet or through virtualization. A companies may offer these services for free or for a subscription fee based on the computing resources consumed.

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Driver, Trends, Challenges

Our report provides a detailed analysis of drivers, trends, and challenges so that market players can stand out amongst their competitors.  

Kye Market Drivers

The increased use of containers will boost adoption and will notably drive the market growth. With the emergence of multiple platforms and OSes, organizations are looking for consistency in the application development environments. Containers and microservices are emerging as an alternative solution to virtual machines (VMs) that consume higher resources. Containers have their dedicated CPUs and memory, such as VMs, but they share the kernel of the OS. As a result, containers do not need a guest OS or a hypervisor, which makes them lighter than VMs. Several organizations face issues when moving applications among environments. Containers package the applications and all the OS dependencies in a single package. This enables easy movement of applications among such platforms and makes the container and microservices architecture a viable solution for the this environment. Containers provide an increased level of visibility toward application performance. They also provide agility and cost benefits that are otherwise difficult to achieve with virtualization technologies as they consume higher system resources. 

Container and microservice architecture allow rapid scaling across different environments. The scalability of their IT infrastructure is critical as organizations are looking to expand their business. The container and microservices architecture aid in scaling effectively and efficiently. Docker is among the most popular container technologies that organizations are leveraging. It offers similar functionalities as VMs without affecting host resources. However, Docker lacks uniform support across different platforms. As a result, several organizations are opting to deploy Kubernetes. Google Kubernetes Engine (GKE) and RedHat Inc.'s OpenShift are also gaining traction in the market. The above-mentioned factors will spur the market growth and trends during the forecast period.

Marketing Trends and Analysis

An increase in cloud orchestration and cloud management software is one of the major market trends. The adoption of hybrid solutions has increased in recent years as it offers agility. However, managing a hybrid cloud can be a challenge as there are different management tools for on-premises infrastructure and for managing the public cloud. The rise in hybrid deployments has resulted in a subsequent increase in the orchestration software. 

Cloud orchestration refers to the use of programming techniques to manage interconnections between the different public and private cloud computing environments. It is used to provision and deploy equipment, manage networking, and create VMs, among other functions. This software can work across multiple environments and in different geographical environments with different service providers. This makes cloud orchestration software an ideal solution for hybrid cloud deployments. 

Key Challenges and Opportunities

The companies lock-in and operational complexities are major challenges impeding the market growth. companies lock-in, also known as customer lock-in or proprietary lock-in, is where a customer using a product or service cannot easily transition to another companies's product or service. This makes a customer dependent on a companies for products and services, due to which the enterprise/customer cannot use the technology, solution, or service developed by other companies. Therefore, it may be difficult to switch to public service providers after all the data has been stored in the private platform. It also becomes more difficult to switch among different private companies because an application is built using a specific platform and set of tools. Each companies may not support the same languages, libraries, APIs, architecture, or OS used to build and run applications or store information. 

Although it is possible to switch between private cloud providers, the process can be time-consuming, labor-intensive, and expensive. Switching between companies may even result in rebuilding or altering an application to fit the new platform. However, at the time of filing its S1, its infrastructure was directly tied to Google Cloud, which prevented the company from making this transition and led to additional costs and excess resource allocation. Thus, companies lock-in can pose a challenge for the global private services market during the forecast period.

Market Segmentation by Deployment

Public cloud services are the largest segment within this market. In 2022, the public segment dominated the growth of the IT and BFSI sectors.

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The public cloud segment showed a gradual increase in the market share of USD 133.45 billion in 2017 and continued to grow until 2021. More than half of enterprises worldwide are using multiple services. Public adoption is expected to grow significantly in the next three years. Over half of businesses currently use system for data storage and management. The demand for public services in the financial services industry is rising due to an increase in the number of SMEs in developing economies such as China, India, and Mexico, which demand solutions for business-related insights.

Market Segmentation By Service

Software as a Service (SaaS)

Based on services, the Saas segment holds the largest market share. In 2022, Software-as-a-Service (SaaS) dominated the global market. SaaS allows users to access software via the internet, eliminating the need for diverse application development. It simplifies mobile workforce mobilization, while these providers ensure data security.

SaaS offers ERP, CRM, HRM, and platform solutions like AI, big data, and IoT for real-time decision-making. Messaging apps and social media usage boost SaaS adoption. Private SaaS enhances data security, migration ease, and software customization. AWS offers Xacta 360 for IT risk and compliance management. SaaS aids remote access for emails, calendars, and marketing services like Salesforce's Email Studio. Demand for SaaS-driven CRM grows in retail, healthcare, BFSI, telecom, and IT sectors for improved operations and cost efficiency. Private SaaS partnerships will fuel growth in this market segment.

Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) is one of the most popular types of industry services. The Infrastructure as a Service (IaaS) segment in the market is witnessing exponential growth, driven by businesses across various industries like manufacturing. Amid the pandemic, investments in such solutions surged, with a notable focus on data centers and edge computing. Japan, a key player in this technology, is witnessing increased adoption. The convergence of artificial intelligence and machine learning further enhances cloud capabilities, offering businesses and customers scalable and efficient solutions.

Platform as a Service (PaaS)

Platform as a Service (PaaS) is reshaping the market, leveraging infrastructure to fuel a global transformation. With the advent of 5G, PaaS has gained popularity, enabling scalable machine learning solutions. Major players like IBM are capitalizing on PaaS advantages, accommodating diverse workloads across markets. As the scale of the economy in a digitally connected world, PaaS emerges as a pivotal force, driving efficiency and innovation while offering a dynamic platform for businesses worldwide.

Regional Overview

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North America is estimated to contribute 50% to the growth of the global market during the forecast period. North America is currently the largest market, followed by Europe and Asia Pacific. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

In 2022, North America was the largest regional segment of the global market. Buyers of the services are enterprises from various end-user industries such as government, IT, BFSI, retail, and others. Organizations are increasingly adopting these solutions as they are cost-effective, scalable, and require minimal management. The majority of the established services providers, such as AWS, Google, and others, are headquartered in the US and are investing in the region to strengthen their offerings. 

Hybrid Cloud Solutions

Hybrid Cloud Solutions dominate current market trends, offering a strategic blend of integration and flexibility. In the industry, market growth analysis underscores the significance of hybrid solutions in addressing diverse needs across sectors. As organizations worldwide seek to scale efficiently, hybrid's ability to balance on-premise and environments is in high demand. This approach ensures optimal order and analytics, reflecting the evolving landscape and the dynamic requirements of the global market.

Industry Verticals Adopting Cloud Computing

Various industry verticals are increasingly embracing to propel growth and innovation. The integration of these solutions is pivotal for economies seeking efficiency and scalability. Market research highlights the widespread adoption across sectors, emphasizing the role in driving economic development. Machine Learning (ML) applications further enhance industry capabilities, positioning technology as a key driver for research and growth within the dynamic landscape of the industry.

Market Customer Landscape

The market trends and analysis report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market research and growth report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.

Global Market Customer Landscape

Key Players in the Market

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

Alibaba Group - The company's key offerings include?a multi-model cloud-native database and distributed cloud services.

The market growth and forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market companies, including:

• Adobe Inc.
• Alibaba Group Holding Ltd.
• Alphabet Inc.
• Amazon.com Inc.
• Cisco Systems Inc.
• Citrix Systems Inc.
• Dell Technologies Inc.
• Hewlett Packard Enterprise Co.
• Huawei Technologies Co. Ltd.
• International Business Machines Corp.
• NetApp Inc.
• Nutanix Inc.
• Oracle Corp.
• Rackspace Technology Inc.
• Red Hat Inc.
• Salesforce.com Inc.
• Tata Consultancy Services Ltd.
• Microsoft Corp.
• SAP SE
• VMware Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Our market analysis and report provides data that is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The Market has experienced exponential growth, driven by the increasing reliance of businesses and customers on cloud infrastructure. With advancements in artificial intelligence and machine learning, investments in cloud technologies have surged, particularly in data centers and edge computing. The pandemic accelerated the adoption of solutions, with Japan emerging as a key player in the industry. IBM has capitalized on this trend, offering services that cater to various workloads and markets. The flexibility and scalability of cloud infrastructure provide businesses with a competitive advantage in today's digital economy. Market segmentation includes Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), with hybrid cloud solutions gaining popularity across industry verticals. Integration of technologies is reshaping the world order, driving transformation and analytics across diverse sectors.

The market is experiencing a paradigm shift with the integration of digital media, smart applications, and blockchain, emphasizing privacy and leveraging historical data. Large enterprises play a pivotal role, contributing significantly to company revenue shares. Regional opportunities abound, fostering infrastructure-as-a-service (IaaS) and private deployment models. The BFSI segment and manufacturing sector are actively adopting hybrid models, while omnicloud systems offer extensive capabilities. Pay-as-you-go models enhance flexibility, catering to the evolving needs of developing countries in the dynamic landscape of cloud computing.

Segment Overview

The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. 

• Deployment Outlook (USD Billion, 2017 - 2027)
  • Public cloud
  • Private cloud
• Service Outlook (USD Billion, 2017 - 2027)
  • SaaS
  • IaaS
  • PaaS
• Region Outlook (USD Billion, 2017 - 2027)
  • North America
    • The U.S.
    • Canada
  • Europe
    • The U.K.
    • Germany
    • France
    • Rest of Europe
  • APAC
    • China
    • India
  • Middle East & Africa
    • Saudi Arabia
    • South Africa
    • Rest of the Middle East & Africa
  • South America
    • Chile
    • Brazil
    • Argentina

 

Cloud Computing Market Scope
Report Coverage	Details
Page number	179
Base year	2022
Historic period	2017-2021
Forecast period	2023-2027
Growth momentum & CAGR	Accelerate at a CAGR of 17.32%
Market growth 2023-2027	USD 429.6 billion
Market structure	Fragmented
YoY growth 2022-2023(%)	12.0
Regional analysis	North America, APAC, Europe, South America, and Middle East and Africa
Performing market contribution	North America at 50%
Key countries	US, Canada, China, UK, and Germany
Competitive landscape	Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks
Key companies profiled	Adobe Inc., Alibaba Group Holding Ltd., Alphabet Inc., Amazon.com Inc., Cisco Systems Inc., Citrix Systems Inc., Dell Technologies Inc., Hewlett Packard Enterprise Co., Huawei Technologies Co. Ltd., International Business Machines Corp., NetApp Inc., Nutanix Inc., Oracle Corp., Rackspace Technology Inc., Red Hat Inc., Salesforce.com Inc., Tata Consultancy Services Ltd., Microsoft Corp., SAP SE, and VMware Inc.
Market dynamics	Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period
Customization purview	If our market forecasting report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2023 and 2027
• Precise estimation of the size of the market  size and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming trends and changes in consumer behavior
• Growth of the market industry across North America, APAC, Europe, South America, and Middle East and Africa
• Thorough analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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