Cloud Infrastructure Service Market Size, Share & Trends Analysis Report By Type (Compute as a Service, Storage as a Service, Recovery and Backup as a service, Disaster Recovery and Backup as a Service, Others), By Deployment Model (Public, Private, Hybrid), By Enterprise Size (Small and Medium Enterprises (SMEs), Large enterprise) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Market Overview

The global cloud infrastructure service market size was valued at USD 121.95 billion in 2023 and is projected to reach a value of USD 598.83 billion by 2032, registering a CAGR of 17.30% during the forecast period (2024-2032). The increase in cloud infrastructure service market share during the forecast period is related to the advantages of cloud infrastructure services, such as improved efficiency, lower server space and data access costs, and the ability to access data from anywhere.

Cloud infrastructure services, or Infrastructure as a Service (IaaS), provide the infrastructure required to administer SaaS tools, such as servers, storage, networking devices, and other resources. IaaS provides a comprehensive data center framework, reducing the need for resource-intensive on-site installations. Cloud service providers include Amazon Web Services (AWS), Microsoft Azure, and Google Compute Engine. IaaS provides monthly or annual subscriptions, eliminating the requirement for on-premises software licensing and resulting in lower expenses. It also offers additional flexibility since businesses can acquire services on an on-demand, as-needed basis and cancel subscriptions or shut down services when they are no longer needed.

Furthermore, IaaS offers greater scalability because the cloud service provider provides the essential equipment and software. It allows businesses to rapidly scale solutions as user needs change without investing in resources or devoting extra IT workers to run the service. Cloud infrastructure services (IaaS) provide the infrastructure to manage SaaS tools, such as servers, storage, networking devices, and other resources. IaaS offers various advantages, including lower prices, better flexibility, and improved scalability, making it a popular choice for enterprises seeking cloud computing services. 

Highlights

• By Type, Storage as a service dominates the market.
• The public segment holds the largest share by deployment model.
• Large enterprise size leads the segment by enterprise. 

Market Dynamics

Global cloud infrastructure service market drivers:

Increased demand for cloud services

The growing demand for cloud services is a significant driver of the worldwide cloud infrastructure services industry. Worldwide spending on public cloud services and infrastructure is forecast to reach USD 1.3 trillion in 2025, growing at a 5-year CAGR of 16.9% from 2020 to 2025. This need is mainly driven by organizations looking to reduce operating expenses and an increasing demand for cloud storage, disaster recovery, and backup services. Cloud infrastructure services appeal to enterprises of all sizes due to their flexibility, scalability, and security. Businesses can use cloud storage solutions to access data from anywhere, grow storage requirements on demand, and avoid the capital costs associated with traditional storage equipment. 

Additionally, cloud-based disaster recovery solutions enable businesses to recover swiftly from data breaches or system failures, reducing downtime and loss of productivity. Regular cloud backups protect essential corporate data from unintentional deletion, hackers, and other unforeseen incidents. These cloud services contribute to a strong IT strategy, allowing firms to adjust to market changes and preserve a competitive advantage quickly. The pay-as-you-go approach of cloud services adds to its attractiveness, allowing businesses to pay only for what they use and better manage spending. As a result, the cloud infrastructure market is expanding rapidly, fuelled by compelling benefits that coincide with modern organizations' strategic goals.

Growing need for disaster recovery and backup services 

The increasing demand for disaster recovery and backup services is a significant driver of cloud infrastructure adoption. Businesses increasingly rely on cloud-based disaster recovery and backup solutions to secure and maintain vital data and applications in unexpected outages, data loss, or other disturbances. 37% of 2023 TechTarget’s Computer Weekly IT Priorities Survey respondents said they prioritized disaster recovery for data protection, and 45% concentrated on cloud infrastructure and operations. Cloud disaster recovery and backup solutions provide various advantages over traditional on-premises solutions. They provide scalable, secure, low-cost data storage and protection solutions for enterprises. 

Similarly, businesses that use the cloud can benefit from features such as high availability, automatic replication, and rapid failover capabilities, which are critical for guaranteeing business continuity during a disaster. One significant advantage of cloud-based disaster recovery and backup solutions is their ability to recover data and apps during a disaster quickly. These systems provide low Recovery Time Objectives (RTO) and Recovery Point Objectives (RPO), allowing enterprises to resume operations quickly and reduce downtime. Furthermore, cloud-based solutions frequently include capabilities such as incremental backups, application-consistent backups, and fast recovery options, improving disaster recovery operations' efficiency and effectiveness.

Global cloud infrastructure service market restraints:

Security and compliance concerns 

Security and compliance problems are critical barriers to the cloud infrastructure service business. Businesses often hesitate to utilize cloud services due to concerns about data breaches, cyber assaults, and data loss. Furthermore, the requirement to comply with numerous regulations and standards, such as GDPR and HIPAA, might make it difficult for organizations to embrace cloud services. Maintaining a cloud-based business requires conforming to established standards and rules for cloud computing.  Cloud storage and management standards, established by governmental organizations, industry associations, or corporate policies, assure data security and responsible use. Compliance protects sensitive information, promotes data privacy, and fosters confidence between cloud service providers and their customers. 

However, attaining cloud compliance can take time due to the complexity and changing nature of the cloud infrastructure. Compliance requires a diverse approach to guarantee cloud usage meets regulatory, legal, and internal norms. Critical components such as encryption, access controls, and audit trails must be understood and implemented to manage data effectively. Regular inspections and upgrades are necessary to maintain cloud compliance with applicable rules and regulations, such as GDPR for EU individuals and HIPAA for healthcare-related data in the US. Failure to comply with these regulations can lead to hefty fines and reputational damage.

Global cloud infrastructure service market opportunity:

Increasing adoption of cloud technologies by large enterprises 

Cloud infrastructure services are growing as large organizations use cloud technologies. Most significant organizations use cloud services, with over 90% doing so. Cloud infrastructure services help large enterprises decrease costs, boost efficiency, and compete. Due to its low cost, scalability, and flexibility, cloud infrastructure services are enticing to expanding businesses. The benefits of cloud infrastructure include cheaper IT costs, more productivity, and better collaboration. Large companies can use cloud infrastructure services to save the upfront costs of buying and maintaining their IT equipment and pay for only what they need. They can scale IT resources up or down without additional costs. 

Additionally, cloud infrastructure services improve productivity and cooperation while lowering costs. Large companies can use cloud-based tools and apps to let employees work from anywhere, anytime, on any device. This flexibility can boost production because people can work when and where they perform best. Cloud infrastructure allows teams to collaborate on projects and documents in real-time, regardless of location. Cloud infrastructure services strengthen security and compliance, essential for protecting sensitive data and following rules. Cloud service providers protect massive company data with data encryption, firewalls, and intrusion detection and prevention systems. Cloud service providers offer compliance services like data backup and disaster recovery to assure data availability during a disaster.

Regional Analysis

North America Dominates the Global Market

The global cloud infrastructure service market analysis is conducted in North America, Europe, Asia-Pacific, the Middle East and Africa, and Latin America.

North America is the most significant market shareholder and is estimated to grow at a CAGR of 16.8% over the forecast period. Due to technical advancements and growing digital transformation across industries, North America dominates the worldwide Cloud Infrastructure Service market. According to the US Bureau of Economic Analysis, cloud computing will account for 8.2% of the country's GDP in 2023, demonstrating its considerable economic influence. Furthermore, the Cloud Security Alliance reported that 78% of North American organizations have implemented a multi-cloud strategy by 2024, up from 69% the previous year. This supremacy is powered by major cloud service providers and a thriving startup environment constantly pushing cloud technology's limits. The region's high emphasis on data privacy and security has resulted in the development of innovative cloud security solutions, which has accelerated market growth. 

In addition, North American enterprises have been eager to adopt developing technologies such as edge computing and serverless architecture, which are closely related to cloud infrastructure services. The region's leadership in artificial intelligence and machine learning research has increased demand for high-performance cloud computing resources. Government measures pushing cloud usage in the public sector have helped to develop the market. The flexibility and scalability of cloud services have proven especially important for firms transitioning to remote work models and digital-first agendas. As enterprises prioritize agility and cost-efficiency, the North American cloud infrastructure service industry is positioned for continued development and innovation.

Europe is estimated to grow at a CAGR of 17.2% over the forecast period, driven by strict data protection rules and developing digital initiatives. According to the European Commission, 41% of EU firms will adopt cloud computing services in 2023, focusing on software as a service (SaaS) solutions. Furthermore, Eurostat data showed that cloud use among European enterprises increased by 12% in 2024 over the previous year. Europe's dominant position in this industry is due to stringent data protection legislation, such as GDPR, which has encouraged the creation of compliant cloud services. The region's focus on digital sovereignty has resulted in more significant investment in local cloud infrastructure and services. European countries have been at the forefront of developing green cloud computing technologies aligning with the continent's ambitious climate targets. 

Similarly, the European Union's Digital Single Market plan has boosted cross-border cloud service use, resulting in a more unified marketplace. Many European countries have introduced cloud-first policies for government organizations, increasing public sector cloud adoption. The region's strong manufacturing industry has increasingly relied on cloud services for Industry 4.0 projects, driving demand for specialist industrial cloud solutions. Europe's dedication to supporting competition in the digital economy has led to support for local cloud service providers, resulting in a diversified ecosystem. As Europe strives to balance technological advances with data security and sustainability, the cloud infrastructure service industry is poised for continuous growth and innovation.

Segmental Analysis

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

The cloud infrastructure service market is further segmented by type into Compute as a service, Storage as a service, Disaster recovery and backup as a service, and others. 

Computing as a Service (CaaS) dominates the market for cloud infrastructure services. It provides scalable computing resources such as virtual machines, containers, and serverless computing environments on demand. CaaS providers allow businesses to dynamically modify computing power based on workload fluctuations, optimizing resource consumption and cost-efficiency. This area is crucial for companies of all sizes looking for flexible, scalable computing solutions that do not require a significant upfront investment in physical infrastructure. CaaS companies frequently integrate with other cloud services, which improves enterprise cloud ecosystem capabilities.

Storage as a Service (STaaS) is a sub-dominant segment of the cloud infrastructure services market. It provides scalable storage solutions that enable enterprises to store and retrieve data via the Internet. STaaS offers options for object storage, block storage, and file storage to meet various requirements. Businesses gain from lower capital expenditures on storage infrastructure, increased data accessibility, and better data safety due to built-in redundancy and disaster recovery capabilities. While less well-known than CaaS, STaaS enables enterprises to efficiently manage and secure their expanding data volumes. It supports various applications, from backup and archiving to big data analytics and content delivery networks.

The deployment model further segments the cloud infrastructure service market into public, private, and hybrid.

The public cloud deployment paradigm dominates the cloud infrastructure service market. Third-party vendors deliver public cloud services via the Internet, providing scalability, cost-effectiveness, and pay-as-you-go access to diverse computing resources. Outsourcing infrastructure management benefits organizations by decreasing initial expenses and leveraging the provider's experience in security and compliance. Public clouds are suitable for businesses of all sizes that need the flexibility to scale resources based on demand, from startups to huge enterprises with unpredictable workloads and global operations.

Private cloud deployment is a small but significant sector of the cloud infrastructure service market. It provides specialized computing resources that are segregated and used only by one enterprise. Private clouds offer greater control over data protection, compliance, and customization than public clouds. They are preferred by companies with strict regulatory requirements, requiring sensitive data processing or particular operating preferences that necessitate a dedicated infrastructure. Organizations that use private clouds benefit from enhanced reliability, customization possibilities, and the ability to maintain legacy systems while implementing cloud capabilities.

Hybrid cloud deployment is a growing area of the cloud infrastructure services market. It combines public and private cloud environments, allowing businesses to orchestrate workloads across both platforms based on individual needs. Hybrid clouds will enable you to balance cost-effectiveness and control, offering seamless data and application migration, disaster recovery solutions, and workload optimization tactics. As businesses increasingly adopt hybrid cloud strategies to improve agility and efficiency, this category is expected to rise significantly, driven by the need for hybrid IT environments that mix the best public and private cloud benefits.

The cloud infrastructure service market is further segmented by enterprise size into Small and medium enterprises (SMEs) and Large enterprises.

Large organizations are the dominating category in the cloud infrastructure service market. Cloud services such as scalability, agility, and global reach satisfy these enterprises' broad IT needs. Large organizations benefit from cloud providers' economies of scale, which allow them to reduce IT expenses, streamline operations, and manage complicated business processes across several geographical locations. They use cloud infrastructure for mission-critical applications, big data analytics, and enterprise resource planning (ERP) systems, which promotes innovation and competitiveness.

Small and medium-sized organizations (SMEs) are a sub-dominant category in the cloud infrastructure service industry. SMEs usually have limited IT resources and budget constraints, making cloud services an appealing alternative for accessing modern IT capabilities without requiring a significant upfront investment. Cloud infrastructure services enable SMEs to increase scalability, collaborate more effectively, and swiftly deploy innovative solutions. They profit from pay-as-you-go pricing structures, which provide cost-effective scalability and flexibility when managing IT infrastructure. SMEs frequently prioritize cloud solutions for email hosting, data storage, customer relationship management (CRM), and web hosting to improve operational efficiency and competitiveness in their particular markets.

Recent Developments

• March 2024- Lytus Technologies Holdings PTV. Ltd. introduced Lytus Cloud, an enterprise computing-focused suite of cloud infrastructure services. The introduction signifies the organization's calculated foray into the domain of cloud computing, specifically emphasizing infrastructure for high-performance computing (HPC).