Cloud Infrastructure Service Market

Market Overview

The global cloud infrastructure service market size was valued at USD 23.21 billion in 2017 and anticipate to grow at a CAGR of 16.1% during the forecast period 2019-2026.

Cloud infrastructure service refers to a virtual infrastructure accessed or delivered through the network or the internet. This usually refers to on-demand services or products that are being delivered through the model known as infrastructure as a service (IaaS). Increasing government initiatives to adopt technologies for digital transformation such as cloud and analytics are expected to propel the cloud infrastructure service market.

Cost-effective services offered by cloud are one of the major factors that is likely to drive the market growth during the forecast period 2019–2026. Moreover, accessing data in the network through a common storage space is also likely to drive the cloud infrastructure service market growth due to ease of access, availability of data at any point of time, and portability among others. Companies' approach towards automation for achieving specific business goals is further expected to drive the cloud infrastructure market.

However, even after the cloud offerings with numerous benefits large organizations are tentative about transferring their data to the cloud due to various security concerns. Although it’s rapidly being adopted across organizations owing to its enhanced cloud-based technology services which are further expected to bring in opportunities for the cloud infrastructure service market. The software as a Service model is expected to witness the highest adoption in the coming five years, as enterprises are deploying this service model to cut down on the CAPEX cost and focus on their core competencies instead of worrying about the IT infrastructure.

Market Dynamics

The cloud infrastructure service market is expected to witness dynamic growth during the forecast period 2019–2026. This is attributed due to increased ICT spending and trend of analytics and big data. Additionally, growing demand from organizations for agile, cost-effective and scalable computing drives the market growth.

Moreover, rising number of digital services and its applications are further expected to fuel the market. High penetration of hybrid cloud is also expected to boost the market in near future.

Segmental Analysis

The global cloud infrastructure service market is segmented by type, deployment model, enterprise size, and region.

On the Basis of Type

The global cloud infrastructure service market is segmented into computing as a service, storage as a service, disaster recovery and backup as a service, and others. Embracing cloud services is expected to continue owing to rise in demand to the improved usage of cloud-based services such as increased efficiency, mobility, streamlined connectivity, cost-effectiveness, and speed of connectivity. With cloud computing on increasing demand it is thereby predicted to raise the demand for cloud services and solutions influencing the market grow in the segment.  Additionally, software as a service which is licensed on a subscription basis and centrally hosted is expected to witness prominent growth in cloud infrastructure service market. Furthermore, the growing demand for Google apps, Salesforce, and Citrix GoToMeeting is likely to represent the largest share in cloud market. According to KPMG, embracing platform as a service (PaaS) is expected to witness significant growth in cloud platforms—rising from 32% in 2017 to 56% adoption in 2020. These solutions offer platforms that will allow its customers to develop, launch and manage applications that are easier to maintain and build infrastructure.

By Deployment Model

The global cloud infrastructure service market is segmented into public, private and hybrid. Hybrid cloud solutions is expected to witness significant growth in cloud infrastructure service market owing to cloud-to-cloud connectivity and cloud-to-on-premise connectivity options offered by hybrid deployment model for connecting multiple solutions.

Based on Enterprise Size

The global cloud infrastructure service market is segmented into SME and large enterprises. The enterprise segment is likely to witness considerable growth in cloud infrastructure service market in coming years due to most of the enterprises inclining towards cloud-based services along with its on-premise solutions with various customizations to best fit its business requirements.

Regional Analysis

Geographically, the global cloud infrastructure service market is segmented into North America, Europe, Asia Pacific, and Latin America, Middle East & Africa (LAMEA).

North America is expected to witness dynamic growth in cloud infrastructure service market owing to the early adoption of advanced technologies and the embracing cloud technologies in the region. Additionally, owing to the presence of leading players and the rise in the adoption of personal cloud services by companies is further expected to drive market growth in the region. Moreover, the introduction of state-of-art data centers is expected to be the ideal gateway to North America which minimizes the financial investments required to outsource mission-critical IT equipment. These data centers are designed to maximize efficiency making it easily scalable. Furthermore, optimized IT infrastructure minimizes long-term environmental impact placing a strong emphasis on the sustainability of data centers in designs and operations. These factors are likely to drive the cloud infrastructure market growth in the region.

Europe is expected to witness significant growth in the cloud infrastructure service market due to number of policies and joint research initiatives in the context of an international corporations. European Commission introduced ‘Digital Single Market’ strategy which aims to open digital opportunities for individuals and businesses enhancing Europe’s position as a world leader in digital economy is further expected to fuel the market growth in the region. Among many policy collaborations in Europe one of the effective projects in Europe and Japan with high visibility was ‘ClouT’—a project representing cloud computing and the Internet of Things (IoT) to create smart cities. The results of ClouT were open to cloud and IoT communities assisting smart cities offering responsive services to improve the quality of life of its citizens. Furthermore, the ClouT field trials are being deployed in four cities including Genova (Italy), Santander (Spain), and Mitaka & Fujisawa (Japan) validating innovative applications beneficial for smart city domains.

According to Accenture, economic transformation in Asia Pacific is influenced by the growth of digital economy and financial services industry. Additionally, it also predicted that critical business applications in the Cloud is expected to increase from 2% in 2015 to 45% in 2025. Moreover, Asia Pacific the most valuable market to Google Cloud supports its business to grow due to long term investments in the region. The expansion of global cloud platforms (GCP) by Google in these regions promises to bring technical innovations closer for its business processes.

However, LAMEA is expected to witness a healthy growth in cloud infrastructure service market owing to developing network infrastructure in the region providing better growth opportunities in near future.

Cloud Infrastructure Service Market Segmentation

• By Type

  • Compute as a service
  • Storage as a service
  • Disaster recovery and backup as a service
  • Others

• By Deployment Model

  • Public
  • Private
  • Hybrid

• By Enterprise Size

  • Small and medium enterprise (SMEs)
  • Large enterprise

• By Region

  • North America
  • Europe
  • Asia Pacific
  • LAMEA