New York, Jan. 23, 2024 (GLOBE NEWSWIRE) -- The cloud infrastructure service market was valued at USD 131.9 billion in 2023 with significant growth and is projected to reach USD 282.1 billion by 2033 with an outstanding CAGR of 8.11%.
The cloud infrastructure service market is witnessing a substantial surge in demand, pushed by the growing need for advanced cloud-based technologies and the exceptional growth of data quantities. This combination of hardware and software resources, developed in the cloud, is critical for meeting the demands of the digital landscape. Cloud providers worldwide preserve data hubs comprising diverse IT infrastructure elements, containing servers, storage equipment, and networking devices, accomplished through various OS configurations and software installations.
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Implementing a pay-as-you-go model, cloud infrastructure enables significant cost reductions for obtaining and sustaining individual elements. It plays a crucial role in cloud computing by competently splitting the characteristics and operations of hardware and software components and proposing virtualized resources accessible worldwide. Virtual machines, servers, memory, storage, firewalls, and network switches epitomize the diverse range of resources deployed for extensive services like machine learning and artificial intelligence.
As highlighted by a Google Cloud report in January 2022, there's been a significant 41.4% rise in the usage of cloud-based services. Cloud giants are tactically changing legacy enterprise software to cloud-based solutions, with over 50% of cloud decision-makers investing in staff amplification or re-training. The forecast predicts that more than half of enterprise firms will leverage industry cloud platforms for business acceleration by 2027. In the IT sector, cloud infrastructure stands out for its advantages, comprising improved data control, safekeeping, software updates, amplified storage capacity, cost-effectiveness, and high-end management services. As demand in the IT sector grows, the cloud infrastructure market is poised for rapid expansion during the forecasted period.
Key Takeaways
- Public cloud segment rules the type of market segment due to flexibility, scalability, and cost-efficiency.
- Large enterprises lead the organization's size market segment in the cloud infrastructure service market.
- Software as a Service rules the service segment in the cloud infrastructure service market due to its simplicity of use as well as its scalability and subscription-based pricing.
- IT and Telecommunications are dominating the industry services market due to substantial data volumes, support of extensive communication networks, and providing essential IT service infrastructure.
- North America commands a significant 42.30% share in the cloud infrastructure service market, driven by major tech players.
Driving Factors
Cloud Computing Accelerates New Innovations
Cloud computing's role in expediting faster innovation is a significant contributor to its market growth, especially among small and medium-sized businesses. Cloud providers continuously introduce new services and updates, enabling major companies, including startups, to rapidly access advanced technologies like AI. This dynamic ecosystem not only expedites the development of innovative solutions but also provides a competitive edge to businesses leveraging cloud infrastructure for their growth and transformation.
Flexibility and Scalability
This adaptability allows businesses to swiftly adjust their services in response to fluctuating demands. The surge in the occurrence of cloud infrastructure, utilized by over 98% of organizations, is largely driven by its flexibility and scalability. This trend showcases how the ability to scale resources as needed not only enhances operational efficiency but also supports diverse business requirements, catalyzing the expansion of the cloud infrastructure service market.
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Restraining Factors
Rise in Compliance Risks
Compliance risks considerably limit the growth of the cloud infrastructure service market, especially in highly regulated industries like healthcare and finance. The Health Insurance Portability and Accountability Act (HIPAA) in healthcare sets strict standards for how patient data can be stored and managed in the cloud. Ensuring cloud environments comply with these regulations is a complex and ongoing challenge. This complexity can deter regulated industries from fully embracing cloud solutions, as the risk of non-compliance and potential legal and financial repercussions are major concerns.
Growth Opportunities
Implementation of Hybrid Cloud
Hybrid clouds, combining public and private cloud elements, offer organizations the flexibility to maintain some systems on-premises while leveraging the benefits of public cloud services. The significant growth opportunity in the cloud infrastructure services market lies in the increasing adoption of cloud hybrid models among businesses. The key challenge lies in striking the right balance between control and flexibility. The demand for solutions that effectively integrate and manage diverse cloud environments is on the rise. This trend underscores the growing need for hybrid cloud solutions and services, driving market expansion.
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| Report Attribute | Details |
| Market Value (2023) | US$ 131.9 Billion |
| Market Size (2033) | US$ 282.1 Billion |
| CAGR (from 2024 to 2033) | 8.11% from 2024 to 2033 |
| North America Region Revenue Share | 42.30% |
| Historic Period | 2016 to 2023 |
| Base Year | 2023 |
| Forecast Year | 2024 to 2033 |
Regional Analysis
North America commands a significant 42.30% share of the cloud infrastructure service market, driven by major tech players like AWS, Microsoft Azure, and Google Cloud. The U.S., with tech hubs like Seattle and Silicon Valley, leads the market, supported by Canada's growing cloud adoption. The region benefits from widespread digital transformation, a robust startup ecosystem, and substantial cloud technology investments. In Europe, stringent data privacy regulations fuel market growth, with companies like Deutsche Telekom playing a key role. Asia-Pacific experiencing rapid expansion, led by China and Japan, driven by a growing digital economy and increasing demand for cost-effective IT solutions.
Segment Analysis
By type analysis, public cloud segment rules the market segment due to the flexibility, scalability, and cost-efficiency that it can provide. Public cloud services provide business users with computing capabilities, such as storage, servers, and networking, that are managed by third-party companies over the Internet. This approach eliminates the need for substantial capital expenditures on infrastructure and is a major draw for businesses seeking to cut IT costs. Hybrid cloud computing combines public and private cloud elements, offering a balance between scalability and security, making it suitable for businesses with diverse IT needs. However, the public cloud's benefits of cost savings, agility, and broad service offerings underpin its market dominance.
By organization size, large enterprises lead the market segment in the cloud infrastructure service market. These organizations often have complex IT needs and require robust, scalable, and secure cloud solutions. The cloud's scalability allows these companies to quickly adapt to market changes and business growth, while its global reach helps them maintain operations across different regions. SMEs increasingly adopt cloud services for their cost-effectiveness and the ability to compete more effectively with larger companies.
By service analysis, Software as a Service leads the segment in the cloud infrastructure service market. SaaS offers businesses access to software hosted on cloud-based infrastructures, removing the need to install or maintain applications on personal PCs. This type of model is popular because of its simplicity of use as well as its scalability and subscription-based pricing, which can reduce initial expenses. IaaS provides virtualized computing resources over the Internet, while PaaS offers hardware and software tools over the Internet, typically for application development.
By industry analysis, IT and Telecommunications are the dominating industries in the cloud infrastructure services market. The cloud's ability to handle substantial data volumes, support extensive communication networks, and provide essential IT service infrastructure aligns perfectly with the requirements of this industry trend. BFSI uses the cloud for secure data storage and managing customer transactions, Government sectors for improving public services and infrastructure, and Healthcare for patient data management and telemedicine.
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Segments covered in this report
By Type
- Public Cloud
- Private Cloud
- Hybrid Cloud
By Organization Size
- Large Enterprises
- Small and Medium-sized Enterprises (SMEs)
By Service
- Software as a Service (SaaS)
- Platform as a Service (PaaS)
- Infrastructure as a Service (IaaS)
By Industry
- IT and Telecommunications
- BFSI
- Government
- Consumer Goods and Retail
- Healthcare
- Manufacturing
- Others
By Geography
- North America
- Europe
- Asia-Pacific
- Latin America
- Middle East & Africa
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Competitive Landscape Analysis
In the competitive Cloud Infrastructure Service Market, industry giants Amazon Web Services Inc. and Microsoft Corporation lead with AWS and Azure, offering scalable and reliable cloud solutions. Google LLC and IBM Corporation, through Google Cloud and IBM Cloud, excel with robust infrastructure and innovations in AI and ML. Oracle Corporation and SAP SE provide to businesses looking for smooth integration by offering cloud services closely aligned with their software solutions and emphasizing enterprise resource planning and database management for diverse business requirements.
Key Players
- Amazon Web Services Inc.
- Oracle Corporation
- IBM Corporation
- Alibaba Group Holding Limited
- Microsoft Corporation
- VMware, Inc.
- Google LLC
- Rackspace Technology, Inc.
- SAP SE
- Salesforce, Inc.
- Rackspace Hosting, Inc
- Dell, Technologies Inc
- Hewlett Packard Enterprise Development Lp
- International Business Machines Corporation
- Cisco Systems, Inc
- Isagenix International LLC
- RyohinKeikaku Co. Ltd.
- Adobe Inc.
Recent Developments
- In January 2024, Huawei organized the "Egypt Internet Innovation Forum," emphasizing its commitment to supporting Egypt's digital transformation through Huawei Cloud services. The forum showcased cloud solutions for fintech, e-commerce, and media, highlighting Huawei's dedication to driving innovation and growth across sectors in Egypt.
- In January 2024, Vantage Data Centers secures $6.4bn funding for expanding hyperscale facilities globally. Investment from DigitalBridge Group and Silver Lake will drive the construction of additional data centers to meet the rising demand for cloud and AI services.
- In January 2024, Microsoft upgraded its cloud services to enable customers to store all personal data within the EU, addressing concerns about data privacy laws. The move aligns with the growing trend of localizing data storage amid EU regulations.
- In January 2024, Accenture announced its acquisition of Navisite, a digital transformation and managed services provider, to enhance its application and infrastructure managed services capabilities. The move aims to assist North American clients in modernizing IT for the AI era, leveraging Navisite's expertise in cloud and digital technologies.
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