The cloud computing market is estimated to grow at a CAGR of 17.32% between 2022 and 2027. The size of the market is forecast to increase by USD 429.6 billion. The growth of the market depends on several factors, including the increased inclination toward cloud computing for cost-cutting, the rise in adoption of cloud among SMEs, and the increased use of containers that will boost cloud adoption.

This report extensively covers market segmentation by deployment (public cloud and private cloud), service (SaaS, IaaS, and PaaS), and geography (North America, APAC, Europe, South America, and the Middle East and Africa). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.

What will be the size of the Cloud Computing Market During the Forecast Period?

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Parent Market Analysis

Technavio categorizes the global cloud computing market as a part of the global Internet services and infrastructure market within the global IT services market. The super parent global IT services market covers companies offering IT consulting and system integration services, application services, electronic data processing services, business process outsourcing services, infrastructure services, and Internet services. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.

Cloud Computing Market: Key Drivers, Trends, Challenges, and Customer Landscape

The increased use of containers will boost cloud adoption and will notably drive market growth, although factors such as vendor lock-in and operational complexities may impede the market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Key Cloud Computing Market Driver

The increased use of containers will boost cloud adoption and will notably drive the cloud computing 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 cloud platforms and makes the container and microservices architecture a viable solution for the cloud 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 cloud 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's growth during the forecast period.

Significant Cloud Computing Market Trend

An increase in cloud orchestration and cloud management software is a major trend in the cloud computing market. The adoption of hybrid cloud 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 cloud deployments has resulted in a subsequent increase in cloud orchestration software. 

Cloud orchestration refers to the use of programming techniques to manage interconnections between the different public and private cloud computing environments. Cloud orchestration is used to provision and deploy equipment, manage networking, and create VMs, among other functions. The cloud orchestration 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. 

Cloud orchestration also helps in bringing multiple tasks, such as scaling and failure recovery, into a single process, and this reduces manual efforts significantly. Besides reducing manual workload, it decreases the likelihood of errors that can occur during provisioning, scaling or other processes. Cloud orchestration software also provides higher visibility into the utilization of hybrid cloud resources. Several more organizations are expected to utilize cloud orchestration software for the single pane of glass management capabilities that they bring. The above-mentioned factors will spur the market's growth during the forecast period.

Major Cloud Computing Market Challenge

The vendor lock-in and operational complexities are major challenges impeding the cloud computing market growth. Vendor 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 vendor's product or service. This makes a customer dependent on a vendor for products and services, due to which the enterprise/customer cannot use the technology, solution, or service developed by other vendors. Therefore, it may be difficult to switch to public cloud service providers after all the data has been stored in the private cloud platform. It also becomes more difficult to switch among different private cloud vendors because an application is built using a specific platform and set of tools. Each vendor 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 vendors 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, vendor lock-in can pose a challenge for the global private cloud services market during the forecast period.

Key Cloud Computing Market Customer Landscape

The 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 report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Global Cloud Computing Market Customer Landscape

Who are the Major Cloud Computing Market Vendors?

Vendors 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 operates under multiple segments including core commerce, and cloud computing among others with a high focus on core commerce.? The company under this segment?offers retail and wholesale commerce in China and internationally. The company's key offerings include?a multi-model cloud-native database and distributed cloud services.

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

• Adobe Inc.
• 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.

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

What is the Fastest-Growing Segment in the Cloud Computing Market?

The market share growth by the public cloud segment will be significant during the forecast period. In 2022, the public cloud segment has dominated the global cloud computing market in the financial services industry, primarily due to increasing globalization and the growth of the IT and BFSI sectors.

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The public cloud segment shows a gradual increase in the market share of USD 133.45 billion in 2017 and continued to grow until 2021. The demand for public cloud 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. Financial service providers share information across networks almost every millisecond and rely heavily on IT infrastructure for optimal uptime, security, connectivity, and data integrity. With the increase in complexities in the financial services industry, financial service companies must compete with one another. Vendors in the public cloud segment in the financial services industry are providing cloud infrastructure to organizations in various end-user industries, which helps them conduct data collection and data analysis to generate meaningful insights into the business. In this type of cloud service, the threat of online cyberattacks is high as the data stored in public cloud systems is exposed to online cyberattacks, such as denial-of-service (DoS) attacks. However, leading vendors in the market are investing in the development of advanced IT security features to make cloud computing services highly secure. Such factors are expected to hinder the adoption of the public cloud segment of the cloud computing market during the forecast period.

Which are the Key Regions for the Cloud Computing Market?

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North America is estimated to contribute 50% to the growth of the global market during the forecast period. 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 cloud computing market. Buyers of cloud computing services are enterprises from various end-user industries such as government, IT, BFSI, retail, and others. Organizations are increasingly adopting cloud solutions as they are cost-effective, scalable, and require minimal management. The majority of the established cloud services providers, such as AWS, Google, and others, are headquartered in the US and are investing in the region to strengthen their cloud offerings. 

One of the major reasons for the growth of the regional market is the increased demand for SaaS and IaaS services. Organizations are investing in upgrading their IT systems to implement advanced enterprise applications and streamline their processes. The flexibility of SaaS solutions makes them suitable for temporary workloads and workloads that are experimental in nature or prone to change unexpectedly. The use of SaaS is increasing in several industries; therefore, several start-ups are coming up with new SaaS offerings to serve different industries in North America 

The growing investments and developments in communication network infrastructure, such as the development and deployment of 4G/5G networks in the region, will likely increase investments in cloud infrastructure. The network has been launched in the US cities of Sacramento, Houston, Indianapolis, and Los Angeles. The investment in telecommunication network infrastructure in the region is driven by an increase in data traffic, which is owing to the rising adoption of IoT devices and the advent of big data analytics. The demand for data centers in North America can be attributed to the exponential growth in data traffic from enterprises and individual consumers. The development of communication network infrastructure is attracting investments in cloud-based data centers in North America. Thus, the use of IaaS is increasing. 

PaaS adoption is driven by the ease of virtualization, dynamic scaling, and automation of administrative tasks. Owing to these benefits, organizations do not need to purchase hardware themselves or employ the expertise to manage it. Moreover, PaaS is offered as the pay-as-go model, which is flexible, as customers can pay on a per-hour/week/month basis. Owing to these benefits, many government organizations have started to adopt PaaS. Thus, the increased use of cloud services such as SaaS, PaaS, and IaaS in North America will drive the regional cloud computing market during the forecast period. 

In 2020, the outbreak of COVID-19 positively impacted the growth of the market. This was because of the adoption of cloud computing solutions by various governments in this region to protect the data on the cloud. This compelled governments to collaborate with the vendors of cloud security solutions to avail of their cloud computing services. Hence, the cloud computing market in this region grew in 2020, and the trend is expected to continue during the forecast period.

Segment Overview

The 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. The market has been segmented by Deployment (Public cloud and Private cloud), Service (SaaS, IaaS, and PaaS), and Geography (North America, APAC, Europe, South America, and Middle East, and Africa).

• 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
    • 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

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What are the Key Data Covered in this Cloud Computing Market Report?

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

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