01 The Rise in Demand for Low-Cost It Infrastructure and Faster Data AccessibilityEnterprises across the globe are focused on creating a mobile workforce, where employees can access data from distant places through internet services, hence requiring virtual sets of IT components such as servers, storage, networks, and others. IaaS enables faster data access irrespective of data center location due to standard IT infrastructure installation. In addition, IaaS incurs low investment costs, as it does not require an on-premise data center and additional services and maintenance costs. Managed service providers, including Amazon Web Services, Inc., Microsoft Corporation, and IBM Corporation, provide continuously available cloud service throughout the year as a part of their integrated cloud service offering.With the most responsive scalability characteristic of pooled cloud servers, end users find IaaS a significant cost savings service where a client only pays for what they use. In addition, end users also avoid the setup costs, which otherwise are incurred by bringing individual servers online. This is a significant factor expected to drive the growth of the marker during the forecast period.
02 Increase in Cloud Adoption across Several Industry VerticalsSeveral industry verticals like banking, financial services and insurance (BFSI), retail, manufacturing, healthcare, telecommunication & IT, media & entertainment, and many others adopt cloud services at a rapid pace. In addition, the banking sector has adopted IaaS at a large scale due to benefits such as cost savings, data protection, and disaster recovery services.Moreover, technological advancements in the IT sector and their applications in large enterprises and SMEs also create an adequate space for market development in developed regions, including North America and Europe. For instance, in December 2016, American Airlines partnered with IBM Corporation to implement IaaS to integrate and streamline its business processes. This strategic move by IBM is anticipated to augment cloud adoption among the end-users.
01 Security Concerns over Private Cloud DeploymentIndustry verticals including BFSI, retail, healthcare, and public sector with large customer bases, are prone to retain critical business information of stakeholders, owing to data privacy and client information. Major cloud service providers adhere to security guidelines, to provide storage and network security across all the developed and developing regions including North America, Europe, Asia-Pacific, and Latin America. In February 2017, Amazon Web Services, Inc. launched alarms on the dashboard in its CloudWatch (network monitoring solution) to enhance the supervision of critical metrics over dashboards.In recent years, high-profile hacking and security breaches in the public cloud have increased substantially. Security concerns over safeguarding stakeholders' information and private data are considered a major restraining factor in cloud infrastructure deployment by several industrial sectors such as BFSI, government, healthcare, retail, and others. Security risks including organizational, physical, technological, compliance, and data breaches are some of the major factors expected to hamper the market growth. Moreover, extended security services attract more prices for cloud deployment, hindering users' cloud adoption process.Furthermore, the lack of IT infrastructure in underdeveloped regions is also expected to hinder market growth to a certain extent. According to the World Economic Forum, an international organization for public-private cooperation, several countries from regions including Asia-Pacific, Latin America, the Middle East, and Africa are yet to transform into technologically advanced hubs with rich IT infrastructure and digital content, and this is expected to hinder the market progression in the coming years. In addition, slow ICT adoption and procurement of IT projects in countries such as Mexico, Chile, Egypt, Thailand, and many others obstruct market development.
01 Growth in Cloud Adoption among SmesIn recent years, cloud infrastructure adoption has increased among SMEs owing to advantages such as enhanced uptime, reliability, enriched IT service, increased flexibility of data access, and operational speed. According to the Cloud Industry Forum, SMEs tend to adopt the cloud primarily for cost-effective business models and virtual networking and storage options. Factors including improved customer support, enhanced business continuity, and replacement of conventional IT infrastructure are expected to create adequate space for market growth during the forecast period.Cloud computing has emerged as a top trend in several industry verticals, including the banking and financial sector, public sectors, healthcare, manufacturing, telecommunication & IT, business service provider, and many others. Document storage, network security, virtual data center, and many other operational needs are carried out through cloud applications, which is anticipated to create potential space for IaaS across the globe. According to the U.S. International Trade, by 2020 Infrastructure-as-a-Service (IaaS) and PaaS (Platform-as-a-Service) are anticipated to be traded more than physical data centers and as a part of IaaS in the coming years.
June 2026 Amazon Web Services (AWS) collaborated with AT&T to expand cloud connectivity capabilities through AWS Interconnect – last mile. The initiative introduced managed connectivity solutions designed to simplify private connections between enterprise locations and AWS cloud infrastructure, supporting businesses in accelerating cloud adoption and improving network flexibility.
May 2026 IBM and Oracle expanded their long-term strategic partnership to support enterprise modernization through AI and hybrid cloud solutions. The collaboration focused on combining IBM Consulting capabilities with Oracle Cloud Infrastructure (OCI) technologies to help organizations deploy scalable cloud environments and modernize enterprise workloads.
May 2026 AWS introduced AWS Interconnect – multicloud connectivity with Oracle Cloud Infrastructure (OCI) in public preview. The service expanded AWS’s multicloud strategy by enabling customers to establish secure, high-speed private connections between AWS environments and OCI infrastructure, supporting flexible cloud deployments.
April 2026 AWS launched the general availability of AWS Interconnect – multicloud with Google Cloud as the first launch partner. The service enabled customers to connect workloads across multiple cloud providers through dedicated private connectivity, reducing complexity in managing multicloud architectures.