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The global public cloud services market is projected to reach USD 1,365.74 million, at a CAGR of 22.7% between 2023 and 2028. The public cloud services market refers to the industry that provides on-demand computing resources and services over the Internet. It is projected to experience significant growth in the coming years due to the increasing adoption of cloud-based solutions by businesses. Industries such as finance, healthcare, and e-commerce are among the key adopters of public cloud services for their operations. Over 90% of businesses that use public cloud services experience cost savings compared to traditional IT infrastructure. This market analysis and report provides market size, historical data spanning from 2018 to 2022, and future projections, all presented in terms of value in USD million for each of the mentioned segments.
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The increasing adoption of IoT, ML, and big data technologies is the key factor driving market growth. Over the last few years, hyperscalers have invested approximately USD 200 billion in capacity expansion and opening new data centers. This increase in the number of hyperscalers will have a positive impact on the global data center server market. Apart from investing in branded servers from companies such as Cisco and Dell Technologies, hyper scalers are increasingly adopting white box servers during their hardware refresh cycle. The generation of massive data has compelled several companies to build data centers of their own or collocated data center to serve their customers in a better way.
In addition, the increasing use of cloud computing is driving the demand for data centers. Therefore, various firms are investing in the launch of new data centers. Setting up a data center at an organizational level can incur huge investments. Therefore, various organizations are opting for public cloud-based storage and server services that help them avoid such investments. Such factors will increase the private and public cloud market growth during the forecast period.
Shift toward server virtualization is the primary trend shaping market growth. In the virtualization process, single physical servers or resources are divided into multiple instances using the backend-as-a-services, virtualization software, DaaS, which permits a greater number of applications to be addressed by a single server or resource. Virtualization involves increments in input/output (I/O) streams through resource pooling from multiple storage devices, which are managed through a data management console. Multiple applications can be executed on one server and adjusted for dynamic changes in usage through this approach.
Moreover, the increased server virtualization adoption can reduce the number of physical servers being used. Various service providers are providing servers and storage capacity by creating virtual instances of a single physical server. Rackspace Technology Inc. provides a virtual cloud server powered by OpenStack. Consequently, the increasing use of virtual servers will boost the growth of the market during the forecast period.
Company lock-ins and operational complexities is a major challenge that affects market growth. Company 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 Company's product or service. It can become difficult to switch public cloud service providers after all the data has been stored in the cloud platform. It becomes more difficult to switch between Companies when an application is built since the application is built using a specific platform and a set of tools.
In addition, although it is possible to switch between providers, the process can be time-consuming, labor-intensive, and expensive. Changing players may even result in rebuilding or altering an application to fit the new platform. Therefore, Company lock-ins may impede market growth during the forecast period.
The market share growth by the SaaS segment will have a significant impact which contributes half of the market growth. SaaS is a cloud service model that involves the central hosting of software programs and other associated data. The hosted programs and data are accessed using a web browser over the internet. SaaS allows users to gain access to various components and features of software programs for a subscription fee.
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The SaaS segment was valued at USD 312.31 million in 2018. The use of public SaaS services is increasing due to characteristics such as elasticity and scalability that are ideal for IT-enabled services. Public SaaS offers a broad scope for data recovery. Users simply sign up to access the software as it provides the required functionality for the software program. Public SaaS also simplifies access to platform solutions such as AI, big data, data analytics, and IoT. Therefore, the demand for SaaS solutions is increasing. The factors mentioned above will drive the growth of this segment during the forecast period.
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North America is estimated to contribute 59% 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. One of the major reasons for the growing demand in the US is the increased adoption of cloud computing services and a rise in data center investments. This model helps users scale resources as per the requirement, making it a viable option for start-ups and SMEs in the region.
In addition, cloud professional services market players are responsible for managing, maintaining, and developing the pool of computing resources shared among multiple tenants across a network. This model helps the sharing of resources such as storage, hardware, OS, databases, middleware, servers, and other software through virtualization. Thus, the demand for public cloud services is increasing during the forecast period.
This market growth and trends 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 Public Cloud Services Market Customer Landscape
Major players in the market include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform.
Examples of other companies booming in the market include:
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. Data 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.
The Global public cloud market is experiencing rapid growth, driven by Digital transformation and the proliferation of Internet and Mobile devices. Key enablers like Big data, Cloud computing, and Internet of things (IoT) are revolutionizing industries with advancements such as Edge computing and 5G connectivity. Real-time insights powered by Artificial intelligence (AI) and Machine learning (ML) are reshaping Business models and Operational processes. Seamless Communication with External partners is facilitated through these services, offering robust Storage, Processing, and Networking power.
Advanced features including Natural language processing (NLP) and Office applications enhance Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) offerings, catering to diverse needs across Enterprise data centers and sectors like BFSI and Manufacturing industry. Comprehensive Data security measures, including Data encryption and Access control, ensure Privacy and compliance, supported by robust Monitoring and auditing and Business continuity services for seamless operations and Enterprise savings.
This market research and growth report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018-2028
Public Cloud Services Market Scope |
|
Report Coverage |
Details |
Page number |
179 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 22.7% |
Market Growth 2024-2028 |
USD 1,365.74 million |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
22.0 |
Regional analysis |
North America, Europe, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 59% |
Key countries |
US, China, Japan, UK, and Germany |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Adobe Inc., Alphabet Inc., Amazon.com Inc., AT and T Inc., Cisco Systems Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., International Business Machines Corp., Microsoft Corp., Oracle Corp., Rackspace Technology Inc., Salesforce Inc., SAP SE, ServiceNow Inc., Tencent Holdings Ltd., Verizon Communications Inc., VMware Inc., Workday Inc., and Alibaba Group Holding Ltd. |
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, and market condition analysis for the forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Service
7 Market Segmentation by Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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