Cloud Computing Market Size, Share & Trends Report

Cloud Computing Market Size, Share & Trends Analysis Report By Service (SaaS, IaaS), By Enterprise Size (Large Enterprises, SMEs), By End Use (BFSI, Manufacturing), By Deployment, And Segment Forecasts, 2021 - 2028

  • Published Date: Jul, 2021
  • Base Year for Estimate: 2020
  • Report ID: GVR-4-68038-210-5
  • Format: Electronic (PDF)
  • Historical Data: 2018 - 2019
  • Number of Pages: 130

Report Overview

The global cloud computing market size was valued at USD 274.79 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 19.1% from 2021 to 2028. The introduction of emerging technologies, such as Artificial Intelligence (AI) and machine learning, enables cloud growth by empowering companies to tap into AI capabilities. As businesses, managers, and employees continue to opt for remote working, due to the COVID-19 pandemic, it has emerged as the latest trend and is expected to continue in the long term. The pandemic is expected to induce one of the most significant workplace transformations. Furthermore, the pandemic is also transforming the way businesses leverage smart technologies, such as mobile supercomputing, Internet of Things (IoT), big data, and AI, to accelerate Industry 4.0, the fourth industrial revolution.

U.S. cloud computing market size, by service, 2018 - 2028 (USD Billion)

The cloud computing market accelerated the demand in Q3 2020 as organizations continued to migrate their workloads from traditional channels to digital formats. The fundamental driving forces for the market are consumerization of IT, diverse landscape of suppliers, new requirements of agile IT thinking, higher availability of skilled workforce, increased awareness of the benefits of cloud computing, government initiatives in support of adopting cloud computing, a rise of emerging technologies, and rapid increase in the number of start-up ecosystems.

The COVID-19 restrictions across the globe have increased the need for accessible and connected systems to manage the flow of data across the enterprise. Enterprises that have not adopted cloud technologies and are still using disconnected toolsets and spreadsheets for their engineering activities have struggled during the COVID-19 pandemic to rapidly reorganize for continued operations. These enterprises have now started to reassess the value of adopting cloud computing.

Cloud trends are essentially guiding an organization’s investment strategies, digital business decision processes, and vendor and technology selection. Rapid digitization is compelling organizations to modernize their application and infrastructure landscape to drive cost efficiency and business agility. By adopting cloud solutions and services, organizations can support their key business activities effectively, move business workloads to a cloud platform, and avoid the latency of the network. Cloud computing offers more efficient and faster ways to adapt and run business operations according to changing market environments. It streamlines the consumerization of technology. Moreover, cloud computing has unleashed unprecedented possibilities to create highly engaging customer experiences. Cloud has driven a behavioral change among people and businesses and enabled multiple lines of businesses to navigate around the tech policies to get things done.

Enterprises across the globe are demanding integrated platforms that can enhance collaboration across varying disciplines, which is expected to propel the demand for cloud computing owing to the significant capabilities it can offer to these industry verticals. Furthermore, a notable rise in the number of companies providing cloud-based deployment and subscription models for their product offerings is expected to drive market growth. For instance, in March 2018, Adobe introduced Adobe Experience Cloud Device Co-op, a common network designed to help brands interact better with customers using various devices and digital touchpoints while maintaining transparency and privacy.

Data security and privacy are the primary concerns of organizations, wherein storage, use, and transmission of information must be digitally protected. Surveys suggest that about 60% of the business-sensitive information on hard drives is held insecurely. Data encryption, authorization management, access control, cloud integration, communication security, monitoring & auditing, and business continuity services are some of the important security services offered by the vendors. For instance, vendors, such as Google LLP, Microsoft Corp., and Amazon.com, Inc., provide 99.9% uptime, which relieves organizations from the burden of creating and maintaining recovery facilities and backup infrastructure.

Service Insights

The Software as a Service (SaaS) segment accounted for the largest revenue share exceeding 54% in 2020. The demand for SaaS can be attributed to its flexible costs and easy maintenance & deployment. The industry estimates suggest that there is a rise in the number of companies moving to the cloud, with 73% of enterprises moving most of their applications to the SaaS platform. In addition, the IT industry survey suggests that by 2022, around 60% of the enterprises would utilize an external service provider’s cloud-managed service offering, which is twice compared to the percentage of organizations in 2018.

SaaS products are expected to witness strong growth in the coming years as their Total Cost of Ownership (TCO) will be equal to that of the on-premise deployment models. In 2018, around 169 SaaS-based acquisitions took place with a mean acquisition price valued at USD 1.3 billion. Qualtrics International, Inc. by SAP SE (USD 8 billion) and GitHub Inc. by Microsoft Corporation (USD 7.5 billion) were the major acquisitions. With more mergers and acquisitions, the establishment of innovative startups in the cloud computing arena is likely to propel market growth over the forecast period.

Deployment Insights

The private deployment segment accounted for the highest market share of over 45% in 2020. Private cloud solely offers computing services over a private internal network or internet and is only provided to select users instead of the public. It provides several benefits to businesses, including scalability, self-service, and elasticity, along with additional customization and controls hosted over an on-premise computing infrastructure. In addition, private clouds also deliver a higher level of privacy and security through internal hosting and firewalls to ensure high-level data protection for third-party providers.

The hybrid deployment segment, which is an integrated environment including public and private models, is anticipated to register a considerable growth rate over the forecast period. The hybrid model has emerged as the most preferred implementation model among industries. The growing focus on developing hybrid cloud models and smart strategies by several organizations help improve business processes, resource utilization, cost optimization, users experience, and application modernization and maximize the benefits. Edge computing has emerged as one of the most important drivers anticipated to accelerate the adoption of hybrid cloud models across organizations worldwide.

Enterprise Size Insights

The large enterprises segment accounted for the highest market share of over 51% in 2020. The demand is attributed to lower operating costs, better collaboration, increased flexibility, and improved time to market. Enterprises used the cloud for building applications and rehosting infrastructure; however, they are now utilizing it to modernize core business applications and processes. As per the estimates made by Cisco Systems, Inc., a software company, more than 94% of the workloads will be processed by cloud data centers in 2021.

Small & Medium Enterprises (SMEs) are expected to emerge as the fastest-growing segment over the forecast period owing to the flexible pricing models offered by CSPs, boost in employee productivity, and improvement in collaboration and innovation. Cloud computing helps SMEs to eliminate repetitive tasks, prioritize work, and improve collaboration among teams. The segment growth can also be attributed to the increasing number of SMEs in emerging countries, such as China and India. Moreover, the increased demand for cloud computing services among SMEs to simplify workflow and decrease operational costs is expected to propel the segment growth.

End-use Insights

The BFSI segment accounted for the highest market share of over 25% in 2020. The segment growth can be attributed to the adoption of cloud services for the storage and management of customer data. Benefits, such as interoperability, secure storage, and 24×7 uptime, have helped the BFSI sector focus more on a customer-centric business model and digitalization of trade & wealth. Furthermore, services, such as payment gateways, online fund transfer, digital wallets, and unified customer experience, are expected to play a significant role in the BFSI industry, facilitating the overall shift to cloud deployment.

Europe cloud computing market share, by end use, 2020 (%)

The manufacturing industry is expected to be the prime adopter of cloud services owing to benefits, such as seamless data management and real-time visibility, offered by these services. Moreover, the manufacturing sector uses computing services for planning enterprise resources, handling supply chain management, and storing information related to enterprise manufacturing. Cloud computing services provide an effective way to analyze, access, and share large amounts of information across the manufacturing industry. The services support manufacturers in realizing tremendous value in terms of cost, speed, and accessibility. In addition, these services offer continuous agility, innovation, business focus, and availability, ability to scale, flexibility, and cost savings, which are further projected to accelerate their adoption across the industry.

Regional Insights

North America dominated the global market with a share of over 40% in 2020. The presence of numerous vendors, such as Microsoft Corp., Oracle Corp., Amazon.com Inc., and International Business Machines Corp., and the higher propensity to adopt new technologies are expected to help this region maintain its position in the market. In the U.S., companies place a strong emphasis on digital transformation and are often considered among the early adopters of next-generation technologies, such as IoT, additive manufacturing, connected industries, big data analytics, Artificial Intelligence (AI), machine learning, AR, and VR, as well as the latest telecommunication technologies, such as 4G, 5G, and LTE. The continued adoption of the latest technologies by enterprises in the U.S. bodes well for the growth of the cloud computing market.

Asia Pacific is anticipated to emerge as the fastest-growing region over the forecast period. The rapid growth of China and India and the emergence of regional players, such as Alibaba Group, positively impact the regional market growth. Moreover, to meet the data sovereignty needs of the governments, hyper-scale cloud providers, such as Microsoft Corp. and Google LLP, are establishing their data centers in markets, such as Indonesia and Thailand. Moreover, the formation of the Asia Cloud Computing Association, a forum based in the APAC region, with the collaboration of Cisco Systems, EMC Corporation, Microsoft, Alcatel-Lucent, NetApp, Rackspace, REACH, Telenor, Nokia Siemens Networks, Verizon, and PLDT/Smart is likely to boost the growth of the regional market.

Key Companies & Market Share Insights

Partnerships, strategic mergers, and acquisitions are anticipated to be the most effective ways for industry players to gain quick access to emerging markets and enhance technological capabilities. For instance, in October 2020, International Business Machines Corporation announced its plan of expanding hybrid cloud growth strategy and execute spin-off of market-leading managed infrastructure services unit. This will assist the company to focus on business expansion strategies. In July 2020, Adobe Inc., International Business Machines Corporation, and Red Hat, Inc. entered into a partnership to strengthen real-time data security and accelerate digital transformation for enterprises, with a particular focus on regulated industries. The partnership was intended toward helping enterprises in delivering a more personalized experience throughout the customer journey, improving engagement, encouraging loyalty, and driving profitability.

Furthermore, product differentiation and upgrades, and service expansion are expected to pave the way for the growth of companies in the market. For instance, in June 2021, Alibaba Cloud announced the expansion of its services in Asia by introducing its first data center in the Philippines. The new data center assisted the company in expanding its service offerings and gaining a competitive edge in the market. Moreover, the rising startup culture and transport analytics startups, such as Databricks, Uptake Technologies Inc., Rubrik, D2iQ, Inc., Vlocity Inc., Confluent Inc., Stratoscale, and SecurityScorecard, are expected to increase the competitive rivalry in the market. Some of the prominent players in the global cloud computing market include:

  • Adobe Inc.

  • Alibaba Group Holding Ltd.

  • Amazon.com Inc.

  • Google LLC

  • International Business Machines Corporation

  • Microsoft Corporation

  • Oracle Corporation

  • Salesforce.com Inc.

  • SAP SE

  • Workday, Inc.

Cloud Computing Market Report Scope

Report Attribute

Details

Market size value in 2021

USD 368.97 billion

Revenue forecast in 2028

USD 1,251.09 billion

Growth rate

CAGR of 19.1% from 2021 to 2028

Base year for estimation

2020

Historical data

2018-2019

Forecast period

2021-2028

Quantitative units

Revenue in USD billion and CAGR from 2021 to 2028

Report coverage

Revenue forecast, company ranking, competitive landscape, growth factors, and trends

Segments covered

Service, deployment, enterprise size, end use, region

Regional scope

North America; Europe; Asia Pacific; Latin America; MEA

Country scope

U.S.; Canada; U.K.; Germany; China; India; Japan; Brazil; Mexico

Key companies profiled

Adobe Inc.; Alibaba Group Holding Ltd.; Amazon.com Inc.; Google LLC; International Business Machines Corp.; Microsoft Corp.; Oracle Corporation; Salesforce.com Inc.; SAP SE; Workday, Inc.

Customization scope

Free report customization (equivalent up to 8 analysts working days) with purchase. Addition or alteration to country, regional, and segment scope.

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Avail customized purchase options to meet your exact research needs. Explore purchase options

Segments Covered in the Report

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2028. For the purpose of this study, Grand View Research has segmented the global cloud computing market report on the basis of service, deployment, enterprise size, end use, and region:

  • Service Outlook (Revenue, USD Billion, 2018 - 2028)

    • Infrastructure as a Service (IaaS)

    • Platform as a Service (PaaS)

    • Software as a Service (SaaS)

  • Deployment Outlook (Revenue, USD Billion, 2018 - 2028)

    • Public

    • Private

    • Hybrid

  • Enterprise Size Outlook (Revenue, USD Billion, 2018 - 2028)

    • Large Enterprises

    • Small & Medium Enterprises

  • End-use Outlook (Revenue, USD Billion, 2018 - 2028)

    • BFSI

    • IT & Telecom

    • Retail & Consumer Goods

    • Manufacturing

    • Energy & Utilities

    • Healthcare

    • Media & Entertainment

    • Government & Public Sector

    • Others

  • Regional Outlook (Revenue, USD Billion, 2018 - 2028)

    • North America

      • U.S.

      • Canada

    • Europe

      • U.K.

      • Germany

    • Asia Pacific

      • China

      • India

      • Japan

    • Latin America

      • Brazil

      • Mexico

    • MEA

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