Cloud Services Market

2020 Analysis and Review: Cloud Service Market by Service Model – Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS) for 2020-2030

About the Report

Cloud services are highly sought-after as they leverage virtualization to provide on-demand computing ability, data storage, and other services to businesses across the world. Increasing adoption of cloud services in various industries such as healthcare, BFSI, government, IT & Telecom has been crucial for growth exhibited by the market. The rising demand for effectively storing, accessing, and managing the staggering volume of data generated by these industries in cloud has been a key growth enabler.

In its new study, ESOMAR-certified market research and consulting firm Future Market Insights (FMI) offers insights about key factors driving demand for cloud services. The report tracks the global sales of cloud services in 20+ high-growth markets, along with analyzing the impact COVID-19 has had on the cloud industry in general, and cloud services in particular.

What Does Future Projection for Cloud Services Market Looks in Comparison to Historical Pattern?

Between 2015 and 2019, global cloud services registered the CAGR of 18.9%. The growth of cloud services is accelerated due to increasing deployment of cloud services to simplify the complex procedure that are highly confidential.

The rise in demand for migration services for migrating the enterprise applications is the latest trend in the market. Migration services enable end-to-end consulting to help businesses efficiently migrate from on-premises applications to virtualized cloud infrastructure without any interruption to system performance.

Many cloud platform vendors are offering these services to cater to changing requirement of end users in verticals such as education, BFSI, media & advertising, IT & telecom, and others. Therefore, the rise in adoption of migration services across verticals such as IT & telecom is the latest trend in the cloud services market. Globally, the cloud services market is expected to reach a valuation of 2.5 Bn by 2030, as per a new study by FMI.

How Cloud Communication Platforms Are Helping SMEs?

In the coming years, it is expected that small and medium enterprises (SMEs) are going to be top adopters of cloud communication platform applications. These services have been helping enterprises to improve business functionality by minimizing operating costs and improving productivity. As investments in cloud communication platform applications in various reliable operating system is significantly rising, small size businesses can also be benefited by improvement in their operational efficiency with minimized IT infrastructure cost. Thus, small and medium enterprises are anticipated to provide numerous opportunities for the cloud services market.

An increasing number of enterprises are adopting Private Business Exchange (PBX) integrated Skype system for enhancing their business services. The new cloud business PBX service means that organizations will benefit from superior enterprise-grade functionality of a hosted PBX system. Moreover, most of the enterprises have started adopting Skype for business within the office 365 package for using the video conferencing and instant messaging functionality. Thus, rising adoption of cloud business services is anticipated to fuel growth of the cloud services market over the forecast period.

Why is Adoption of Cloud Services Increasing?

Legacy businesses are under pressure and lagging because of their inability at coping with the introduction of disruptive business models. In order to stay ahead with digital transformation, these companies require flexible software that will help them in adapting and rethinking critical business processes. In today’s digitalized world, businesses are focusing on adopting a cloud-based application that helps them increase flexibility and scalability in business processes.

Therefore, cloud platform offers deployment of applications without any disruption in the existing software landscape and also provides integrated and optimized enterprise solution that helps business in digital transformation and cost benefits of migration to cloud. So with the rapidly changing needs due to disruptive technologies, organizations are adopting agile applications that give access to relevant and real-time business data, which in turn is expected to proliferate growth of the cloud services market.

Increasing Acceptance of Cloud Platform Services Bolstering Growth

Cloud platform is helping business organizations to develop and deploy applications in the existing software infrastructure quickly. The software is helping legacy businesses to stay ahead of evolving start-ups by building profitable revenue streams with minimal investment. Cloud platforms also allow companies to quickly extend and personalize their applications while creating opportunities for business to grow and transform them digitally. In order to leverage these benefits, the business organizations are significantly utilizing the cloud platform services.

To understand which applications should be deployed on the cloud and how existing infrastructure can be integrated with cloud, the businesses are using strategy, consulting, and integration services. Enterprises are also collaborating with cloud platform service providers to leverage the full benefits of the platform. This is driving the adoption of cloud services in the market.

How are Cyber-threats Affecting the Adoption of Cloud Services?

While cloud services help enterprises to improve business efficiency and reduce cost, still the data stored on cloud is prone to cyber-attack. Digital transformation in enterprises is increasing the volume of data and due to this the number of cyber-attack is also increasing. Cyber-attack like cloud malware injection attack, account or service hijacking, spectre, meltdown, man-in-the-cloud attacks are creating vulnerabilities to enterprise data and this threat may result in business shutdown and losses. However, the cyber-attacks are damaging the business operations so the growth of the cloud services market is restricted.

Family Cloud Plans and Referrals to Catapult Growth

A primary reason for cloud storage service providers to provide generous free storage tiers is that a large part of the market still remains unaddressed and companies can get users to pay for their services easily after they have used their trial versions for some time. For the same reason cloud service providers are providing plans where a user can let his family members join a storage plan that is already being paid for. Companies are also giving incentives in terms of increased storage limit to users in exchange of referring other users.

Country-wise Analysis

How Big is Scope for Cloud Services Sales in the U.S.?

Until 2019, cloud services sales across the U.S. experienced a Y-o-Y growth of over 17% to reach US$ 435 Mn. The market is set to further aggrandize at a CAGR of nearly 17.5% through 2030. U.S. is offering the opportunity for generation of high revenue during the forecast period, owing to presence of key cloud service market players in the country.

According to estimates, the adoption cloud services by businesses is around 62% in U.S. as the adoption of cloud is helping organization to maintain the costly infrastructure.

According to government report, Federal Government Budget for civilian IT was estimated to be at US$45.8 Bn in FY 2019. In the U.S., enterprises are adopting hosted unified communication-as-a-services, which are operated through third party vendors (operators) on subscription based packages through which customers purchase U.C. licenses and activate them according to their need. Moreover, smaller providers offer cost-effective services for SMEs and a quicker product development cycle.

How Lucrative is France’s Cloud Services Landscape?

The adoption rate of cloud services has evolved a lot in France between 2017 and 2019. Around 19% growth is observed for hosted private cloud among the enterprises.  France government has reduced taxes on data centers to encourage cloud investments.

The growing demand for data center services from business and consumer end users are driving investment in France cloud services market. The France cloud services market is estimated to reach a valuation of 467 Mn by the end of 2030 by registering a CAGR of 22.0%.

What Prospects Does U.K. Offers for Cloud Services?

The U.K. is estimated to record an incremental opportunity worth US$ 73.7 Mn during the forecast period. In U.K. around 90% of companies use cloud technology in some capacity. SMEs and public sectors are increasingly adopting the cloud services.

According to cloud industry body CIF, around 78% of organizations in U.K. have adopted at least one cloud-based services. The reason for increasing adoption of cloud services is the flexibility of delivery, scalability and operational cost savings.

The cloud industry forum in U.K. has launched professional membership programme to aid the development of key digital and cloud computing skills due to digital skill shortage in U.K.

How Attractive is Japan Cloud Services Market?

Japan is the largest public cloud market among the East Asian countries and is expected to register a CAGR of 23% during the forecast period. IaaS and PaaS are fastest growing segments in Japan.

Among the industries, manufacturing and BFSI are most advanced users of public cloud in Japan, but the traction is increasing among the IT & Telecom industry. In 2018, Japanese government announced the ‘cloud by default’ policy. The idea behind the policy was that when government agencies are procuring new IT applications, they need to consider the public cloud as the first option and then in order of priority, the private cloud.

How big is Scope for India Cloud Services Market?

India is estimated to register a high growth with a CAGR of 23.0% during the forecast period. The Bring Your Own Device (BYOD) trend in India have become highly popular among employees, who also use their smartphone for work. While BYOD does give users an ease of working from their personal devices, it also results in duplication of files with different versions of files stored in different devices. Companies opting for BYOD, thus have to also keep a unified cloud based storage for managing files efficiently.

India’s small & medium businesses present a huge untapped opportunity, over 60% of businesses adopt cloud and due to COVID-19 pandemic India’s national and state government are playing crucial role in promoting cloud adoption.

How Big is Opportunity for Cloud Services in Brazil?

Brazil cloud services market is estimated to register the CAGR of 18.5% during the forecast period. The adoption of cloud services has grown across all the industries in Brazil. The overall cloud adoption in Brazil increased to around 39% in 2019.

Around 56% of Brazilian companies have set the budget asides for strengthening the cloud security. The adoption of IaaS model is higher than the PaaS model, around 55%.

Category-wise Insights

Which Service Model Dominated in 2020?

The software as a service segment dominated and accounted a market share of 62.5% in 2020. Adoption of SaaS has accelerated due to demand in various industries like healthcare, IT and telecom, government towards transforming the legacy IT structures completely into SaaS-based structure. SaaS provides feature of easy accessibility with speed deployment which makes this easier to operate

Which Deployment Model is Witnessing High Growth?

By deployment model, hybrid cloud segment is estimated to register the CAGR of 22.2% during the forecast period due to ongoing migration of applications over the cloud, resource mobility and emergence of threats are increasing the demand for hybrid cloud in industries such as BFSI, healthcare and government.  

How is Adoption of Cloud Services in SMEs?

By enterprise size, SMEs are expected to register the high CAGR of 20.9% throughout the forecast period. The cloud services are rapidly being adopted by SMEs due to ease and flexibility they offer. The financial benefits motivate the SMEs motivate the SMEs to opt for cloud services.  

Which Industry Will Adopt Cloud Services More?

The IT & Telecom industry is expected to adopt cloud services on a large scale as the cloud services helps to improve the business collaboration and offer team members to share the information easily and securely. Also cloud provides the protection of rapid data recovery and vast data centers able to failover in the event of outages.

Competition Landscape

FMI has profiled the following prominent Cloud Services providers in its report:

  • IBM Corporation
  • Dell Technologies
  • SAP
  • Google
  • Oracle Corporation
  • Cisco System, Inc
  • AWS
  • Fujitsu Global
  • Rackspace Technologies, Inc.

The companies are focusing on extending its product offerings and intellectual property through partnering or collaborating with other key technology players in the market. The internal development of the company maintains technical control over the development of products and designs. The company devotes a large portion of resources to enhancing existing products, developing new products, improving and expanding its technology, and increasing its technological expertise in all of its business areas.

For instance, in June 2020, Wipro Ltd., a global IT consulting and business process services company, announced its collaboration with IBM Corporation to assist Wipro customers embark on a seamless and secure hybrid cloud journey. Through this alliance Wipro will develop hybrid cloud offerings to help businesses manage, migrate, and transform mission-critical workloads and applications, with security across private or public cloud and on-premises IT environments.

Cloud Services Market Report Scope

Attribute

Details

Forecast Period

2020-2030

Historical Data Available for

2015-2019

Market Analysis

US$ Mn for Value & Units for Volume

Key Regions Covered

North America, Europe, Middle East & Africa and Rest of the World

Key Countries Covered

U.S., Canada, Germany, Italy, France, U.K., Spain, GCC and South Africa

Key Segments Covered

Type, Power Rating, Application, and Region

Key Companies Profiled

  • IBM Corporation
  • Microsoft Corporation
  • Cisco System, Inc.,
  • AWS
  • SAP
  • Google
  • Fujitsu Global
  • Rackspace Technology, Inc.
  • Oracle Corporation
  • Dell Technologies

Customization & Pricing

Available upon Request

Key questions answered in the report

  • How will Cloud Services market expand until 2030?

    FMI projects the global Cloud Services market to register a CAGR worth 20.4% across the 2020-2030 assessment period. The adoption of cloud service is increasing in the sectors where work from home initiative is helping to sustain enterprise business function in pandemic.

  • What is the impact on Cloud Services sales?

    In recent years, the demand for cloud services has been increasing as it offers various benefits including access to broader network, on demand service, pay as you go, resource pooling, rapid elasticity, cost cutting and others.

  • Who are the leading players in Cloud Services market?

    Prominent players operating in the global Cloud Services landscape include Dell Technologies, Oracle Corporation, IBM Corporation, Google, SAP SE among others

  • Which is More Preferred Service Model for Cloud Services?

    Software as a Service (SaaS) segment will continue dominating the cloud services landscape, as per FMI study. Higher uptake of across diverse industries including government, healthcare, and others will enable growth in the segment.

  • Which Enterprises in terms of Size are Exhibiting High Demand for Cloud Services?

    The demand from small and medium enterprises is expected to scale higher through the forecast period. The rising demand for effectively managing, storing, and accessing data in cloud will enable expansion of the segment.

Enquiry before Buying

  • Is the Cloud Services market research conducted by FMI?

    Yes, the Cloud Services report has been compiled by expert analysts of FMI through a combination of primary and secondary research. To know more about how the research was conducted, you can speak to the research analyst.

  • What research methodology is followed by FMI?

    FMI follows a methodology that encompasses the demand side assessment of the market, and triangulates the same through a supply side analysis. This methodology is based on use of standard market structure, methods and definitions.

  • Who are the respondents for primary research?

    FMI speaks to stakeholders across the spectrum, including C-level executives, distributors, product manufacturers, industry experts. For a full list of primary respondents, please reach out to us.

  • What are the sources of secondary research?

    FMI conducts extensive secondary research through proprietary databases, paid databases, and information available in the public domain. We refer to industry associations, company press releases, annual reports, investor presentations, and research papers. More information about desk research is available upon request. 

  • Is a sample of this report available for evaluation?

    Yes, you can request a sample and it will be sent to you through an email.

  • How can I buy this report?

    FMI provides a secure online payment system to buy report seamlessly. You can buy the report securely and safely

Key Segments Covered of the Cloud Services Market

Service Model

  • Software as a Service (SaaS)
  • Platform as a Service (PaaS)
  • Infrastructure as a Service (IaaS)

Deployment

  • Public Cloud
  • Private Cloud
  • Hybrid Cloud

Enterprise Size

  • SMEs
  • Large Enterprise

Industry

  • BFSI
  • IT & Telecom
  • Healthcare
  • Manufacturing
  • Government
  • Others

Region

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa (MEA)

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