Home Technology Cloud Services Market Size, Demand, Share, Forecast to 2032

Cloud Services Market Size, Share & Trends Analysis Report By Service Model (IaaS, PaaS, SaaS, BPaaS), By Deployment Model (Public Cloud, Private Cloud, Hybrid Cloud), By Enterprise Size (Large Enterprises, Small and Medium Enterprises), By Industry Vertical (BFSI, IT & Telecommunications, Government, Retail, Healthcare, Energy & Utilities, Media & Entertainment, Manufacturing, Others) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2024-2032

Report Code: SRTE2932DR
Last Updated : Oct 17, 2022
Author : Straits Research
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Market Overview

The global cloud services market size was valued at USD 394.53 billion in 2023. It is expected to reach USD 1,571.63 billion in 2032, growing at a CAGR of 16.6% over the forecast period (2024-2032). The shift towards remote work and virtual collaboration, accelerated by the COVID-19 pandemic, has heightened the demand for cloud-based communication, collaboration tools, and remote access solutions. Cloud services support seamless remote operations and workforce productivity.

Instead of using a local server or a personal computer to store, process, share, and manage data, cloud computing uses a network of remote servers hosted on the Internet. Cloud services are the services made available by cloud computing technologies. It mainly refers to a shared storage area where all networked devices can simultaneously access data. Organizations can save more than 35% of their annual operating costs by implementing cloud services. The second factor includes all the functional qualities that improve an organization's ability to conduct business.

Cloud Services Market

Market Dynamics

Market Drivers

Increase in Demand for Cloud Services

Opting for cloud-computing services provides economic savings such as cost-cutting and reducing capital expenditures. The cost associated with investing in physical IT resources is decreased with cloud computing services, which minimizes capital expenditure. Proper cloud service installations, whether private, public hybrid, or community clouds, can be a reliable tool for reducing overall operating costs.

A survey conducted by Booz Allen Hamilton describes that deployment of cloud computing services saves up to 50 to 60% of the total cost of ownership. Another survey conducted by the CIO magazine determines the belief of the company executives regarding the deployment of cloud computing services concerning cost-cutting. According to the survey, 88% of the respondents pointed toward the cost-cutting benefits. With the introduction of cloud-computing services, the performances of businesses in many sectors have tremendously increased over the years. The following factors contribute to elevating business performance.

  • Reduced costs and proper alignment of expenditures with business needs
  • Strategies and rollouts of new services to customer needs
  • Increased business resilience with the facility of disaster recovery services

Cloud computing services provide an excellent return on investment, automatically increasing business agility. According to a survey by FCW (Federal business technology), 44% of the companies believe they get a quick return on investment by using cloud-computing services. Hence, all these factors contribute to market growth.

Increase in Adoption of Cloud in SMEs

According to a survey by Microsoft Corporation, small and medium-sized firms contributed to the economies of all nations by over 76%. Another finding revealed that 79% of business owners said the technology might make work more fun. To grow their operations and leave a mark on numerous geographies, most SMB IT enterprises need the cutting-edge technology of cloud computing services.

Cloud computing services offer various functional benefits and actively participate in the overall growth of the cloud services market. The functional benefits offered by cloud computing are no upgrading and installation functions, operative use of IT staff, and distributed resources. Eliminations of regular upgrades and installation prove beneficial to the user as the responsibility of upgrade, patching, and add-on installations remain with the service provider.

The use of cloud computing services reduces the workload of the IT staff in maintaining IT infrastructure and helps them to work on other projects making more operative use of IT staff. Moreover, the resources are evenly distributed and can be used by every individual in the cloud. The use of clouds also provides recovery and backup solutions, which improve the agility of the business.

Market Restraints

Concerns Associated with Data Security and Protection

With many advantages, cloud computing technology also caters to some threats. One of the major limiting factors of the cloud computing market is the securitization of confidential data. The cloud platform offers data sharing on a large scale. However, companies hesitate to put their sensitive data in the cloud. In doing so, the organization becomes vulnerable to data breaches and information loss. The hackers and the employees who cannot be trusted can cause severe damage to the company's privacy issues. Generally, private clouds are considered to be safer than other types of clouds.

Most companies are not sure about their data location and jurisdiction. The actual individual responsible for the legal jurisdiction is not precise; most organizations are still unaware of this fact. Moreover, the data stored in the cloud is not centralized and is stored in servers located in different geographies. This makes it very difficult for organizations to track the location of their data. This creates fear among organizations to accept cloud computing services positively. Cloud computing services offer software interfaces, which customers use to interact with the cloud service providers. Cloud computing services' security directly depends upon these interfaces' security. APIs are used by service providers for monitoring and providing value-added services to customers. The API should be protected from any external intervention. Hence, all such challenges of the cloud services industry hinder the market growth.

Market Opportunities

Increased Adoption in the Manufacturing Companies

The manufacturing industry is undergoing a significant transformation due to the growth in technologies such as cloud, analytics, big data, and mobility. The increasing accessibility of flexible pricing models and instant provisioning of redundant resources to manage agility is driving the demand for cloud storage in the manufacturing sector. Manufacturing organizations are gradually transitioning to the cloud to ensure efficiency in producing physical goods and managing product lifecycles, as cloud-based applications provide greater supply chain visibility and enhance forecasting accuracy. For instance, the "Make in India" and "Digital India" initiative by the Indian government is facilitating cloud adoption among manufacturing SMEs and large enterprises. Also, the availability of cost-effective cloud computing solutions and services for manufacturing companies is leading to its high adoption across the manufacturing industry to increase the company's scalability and help it become competitive in the market.

Study Period 2020-2032 CAGR 16.6%
Historical Period 2020-2022 Forecast Period 2024-2032
Base Year 2023 Base Year Market Size USD 394.53 Billion
Forecast Year 2032 Forecast Year Market Size USD 1,571.63 Billion
Largest Market North America Fastest Growing Market Europe
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Regional Analysis

Based on region, the global cloud services market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

North America was the highest revenue contributor and is estimated to grow at a CAGR of 15.3%. North America has been the early adopter of cloud computing services. This region has shown its willingness to embrace this technology in every sector. The IT sector has already adopted this technology. The emerging sector for cloud computing services in the North American region is the healthcare sector. Cloud computing services are adopted mainly in the data recording and keeping of clinical and non-clinical information. The applications used by the IT industry in the North American region can be explained through a chart. Email has been the most deployed cloud computing application so far. However, other applications such as coloration, disaster recovery, and customer-facing e-commerce have also been adopted in the North American region at relatively higher rates. The growth is due to the faster adoption of technology in this region. North America has always been an attractive market for new technologies and services as this region is a developed area with investment capabilities.

Europe is the second largest region. It is estimated to reach an expected value of 435 billion by 2030, registering a CAGR of 15.9%. Europe is the second highest adaptor of cloud computing services among all the regions. The European IaaS market has significantly grown in the past few years. Europe has come up with various initiatives to adopt cloud computing services from the European Commission regulatory body in Europe. The top players in the European cloud computing market are Google Inc, Microsoft, HP, Dell, and Yahoo Incorporation. Europe is becoming a world privacy leader due to various security issues they tend to deal with. Amazon web services is on the verge of developing new products with security functions in this region. This observed growth is mainly due to the rise of cloud computing services in the healthcare sector. The benefits of cloud computing services in the healthcare sector are managing expenditures, faster communication across geographic locations, efficiency in operations, and fast track of treatments. These benefits act as the driving force for the Europe health care market. 

Asia-Pacific is the third largest region. Asia Cloud Computing Association (ACCA), a member-driven organization founded to speed up cloud computing services, was created in the Asia-Pacific region. Governments, cloud users, and cloud service providers are among its members. The estimated investment by China in infrastructure as a service is billions. Additionally, the Asia-Pacific region's competitive environment is particularly alluring. The global leaders in cloud computing services are vying for the Asia-Pacific region's new market. This pushes forward the Asia-Pacific market.

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Segmental Analysis

The global cloud services market is segmented on the service model, deployment model, enterprise size, industry vertical, and region. 

By Service Model Analysis

By service model, the global market is categorized into IaaS, PaaS, SaaS, BPaaS, and management and security services. The software as a service segment was the highest contributor to the market and is estimated to grow at a CAGR of 16.8% during the forecast period. The market of software as a service seems very attractive due to the presence of software as multitenancy—the dominant players in this segment offer software-related software as a service. Microsoft offers software such as Microsoft Exchange Online, which gives access to email, calendars, and contacts over the Internet. Another software is Microsoft share online, which provides a central place for sharing documents and information over the Internet with colleagues and customers. All such factors drive segment growth.

By Deployment Model Analysis

Based on the deployment model, the global market is divided into public cloud, private cloud, and hybrid cloud. The public cloud segment was the highest contributor to the market and is estimated to grow at a CAGR of 15.9% during the forecast period. The observed growth of the public cloud is mainly due to the need for elasticity in the services. The additional expenses of the firms can be slashed by using public clouds, as it is possible to pay only for those resources the company utilizes. This benefit acts as a driving force for public clouds. The limiting factor of this particular segment is the threat of losing confidential data. The opportunity for public cloud lies in medium and small enterprises. As these companies are on the verge of development, there is a need for cost-cutting, which can be efficiently done using public clouds.

By Enterprise Size Analysis

By enterprise size, the global market is categorized into large enterprises and small and medium enterprises. The Large Enterprises segment was the highest contributor to the market and is estimated to grow at a CAGR of 16% during the forecast period. Cloud services providers help large enterprises to virtually eliminate capital expenditures and shoestring budgets while increasing and expanding their business service models with no upfront costs is a significant factor driving the growth of the segment in the global market. Moreover, cloud computing is an essential infrastructure evolution for large businesses to be agile, productive, secure, and competitive in the global market. In addition, the cloud also helps these enterprises save IT costs and benefit them with the latest infrastructure to achieve a competitive advantage and propel their digital transformation. Those mentioned above are some of the major factors expected to drive the growth of the segment in the market in the coming years.

By Industry Vertical Analysis

Depending on the industry vertical, the global market is categorized as BFSI, IT & telecommunications, government, retail, healthcare, energy & utilities, media & entertainment, manufacturing, and others. The BFSI segment was the highest contributor to the market and is estimated to grow at a CAGR of 15.8% during the forecast period. The BFSI segment growth is observed mainly due to cost savings and business swiftness. With the efficient use of a cloud-computing lot of capital expenditure can be converted into low operational costs. These cost benefits can prove very advantageous for the BFSI sector, as the daily operating costs of the banking sector are relatively higher than other sectors. Business agility and continuity with cost benefits act as the driving force for this industry. In addition, the pay-as-you-go benefits, which pay only for the organization's services, are proving to be a boon to this industry. 

Market Size By Service Model

Market Size By Service Model
  • IaaS
  • PaaS
  • SaaS
  • BPaaS


  • List of key players in Cloud Services Market

    1. Alibaba Cloud
    2. Amazon Web Services Inc.
    3. Google LLC
    4. Hewlett Packard Enterprise Development LP
    5. Cisco System Inc.
    6. International Business Machine (IBM) Corporation
    7. Microsoft Corporation
    8. Dell Technologies Inc.
    9. Oracle Corporation
    10. Rackspace Hosting Inc.
    Cloud Services Market Share of Key Players

    Recent Developments


    Cloud Services Market Segmentations

    By Service Model (2020-2032)

    • IaaS
    • PaaS
    • SaaS
    • BPaaS

    By Deployment Model (2020-2032)

    • Public Cloud
    • Private Cloud
    • Hybrid Cloud

    By Enterprise Size (2020-2032)

    • Large Enterprises
    • Small and Medium Enterprises

    By Industry Vertical (2020-2032)

    • BFSI
    • IT & Telecommunications
    • Government
    • Retail
    • Healthcare
    • Energy & Utilities
    • Media & Entertainment
    • Manufacturing
    • Others

    Frequently Asked Questions (FAQs)

    What is the estimated growth rate (CAGR) of the global cloud services market?
    The global cloud services market size is growing at a CAGR of 16.6% from 2024 to 2032.
    North America has the largest share of the cloud services market.
    Increase in demand for cloud services,increase in adoption of cloud in SMEs are the key driver for the growth of the cloud services market.
    Increasing Use of Online Ticketing Platforms is one of the upcoming trend in the cloud services market.
    The key players in the global cloud services market include Alibaba Cloud , Amazon Web Services Inc. , Google LLC , Hewlett Packard Enterprise Development LP , Cisco System Inc. , International Business Machine (IBM) Corporation , Microsoft Corporation


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