The global private cloud server market size was valued at USD 30.24 billion in 2018 and is expected to grow at a compound annual growth rate (CAGR) of 29.6% from 2019 to 2025. Increasing concerns over data security and disaster recovery, coupled with the continued adoption of the bring your own device (BYOD) trend and growing deployment of a mobile workforce and emerging as the key factors that are expected to drive the growth of the market for private cloud server solutions over the forecast period. The growing emphasis on ensuring real-time and quick access to data is also expected to drive the market growth. Private cloud server envisages an infrastructure delivering hosted services fully dedicated to a single organization. It offers all the benefits, such as agility, scalability, and ability to create multiple virtual machines for complex computing tasks and operations, associated with public cloud while maintaining a high level of data security and privacy protection. As such, the single-tenant environment provided by a private cloud server allows businesses to take all the advantages associated with a public cloud server along with more secure and customizable hosted resources, such as storage, computing capacity, and networking.
A private cloud server can be ideal for organizations with dynamic computing needs where direct control over the environment is of utmost importance. As the workforce continues to expand, organizations are increasingly deploying a mobile workforce. At the same time, the growing mobile workforce and the subsequent changes in the demand to access the computing resources and applications at any point of time are prompting organizations to switch to a private cloud server. As this juncture, advances in the technology pertaining to storage availability, threat monitoring, and firewalls are expected to open significant opportunities for the market growth over the forecast period.
Big Data requires extensive storage capabilities across various business units of the organizations and real-time access to information databases. Modern big data platforms hosted by private cloud server providers ensure better resource utilization, lower costs, and better scalability as compared to the conventional big data deployments. Private and public clouds are emerging as the most-adopted big data analytics platforms for various customer segments. Such developments in the big data deployment technologies are anticipated to create lucrative opportunities for the market growth.
Nevertheless, data security is emerging as the primary concern for various organizations, particularly because hosted services can be assessed through wired networks as well as wireless networks. Hence, enterprises are deliberating before adopting hosted solutions for critical business applications. At this juncture, a private cloud server can serve as a much secure solution and provide a high level of data security as compared to its public cloud server. Hence, large organizations with a higher spending capacity are particularly adopting a private cloud server as an integral part of their IT infrastructure.
Based on hosting type, the market has been segmented into user hosting and provider hosting. The user hosting segment dominated the market in 2018 with a market share of over 51%. A user-hosted or an on-premise cloud server allows organizations to have a hosted environment within the organization. User-hosted solutions require an in-house data center to host the private cloud. Such an infrastructure can be considered as a more protected infrastructure as it is managed internally by the organization’s own IT department.
On the other hand, provider-hosted private cloud services are solutions that are hosted at the providers’ end in the providers’ data center. The mediating third-party solution provider is often responsible for the security management of the provider-hosted solutions. Nevertheless, a provider-hosted private cloud server allows enterprises to expand the data storage capacity with minimum capital investment. Moreover, provider-hosted solutions also come with user-friendly dashboards and high-end scalability options along with an excellent support team deployed by the provider.
Based on organization type, the market has been segmented into SME and large enterprise. The large enterprise segment dominated the market in 2018 with a market share of more than 82%. Data security and reliability happen to the major concerns for large organizations. Hence, large organizations often require secure and reliable services. As a result, large organizations particularly prefer private cloud server solutions.
Private cloud server solutions can equally help small and medium enterprise and large enterprises in enhancing their business processes. A private cloud server offers benefits, such as lower operational costs, options to pay as per the usage, and offerings tailored to the business requirement. As such, market players are aggressively encouraging small and medium enterprises to adopt private cloud deployment. They are particularly offering scalable infrastructure and affordable services that can be ideal for small and medium enterprises. The popularity of private cloud server solutions among small and medium businesses is also growing because it enables them to capitalize on 24x7 assistance and eliminates the need to hire a dedicated IT personal.
The North America regional market dominated the global market in 2018 with a market share of more than 48% market share. The U.S. and Canada have taken a lead in the implementation of private cloud server solutions owing to the growing volumes of transactions and subsequently the data at the organizations based in these countries. It has been observed that the leading organizations in North America are leveraging their spending capacity and have increased their IT infrastructure investment to opt for hosted services, thereby boosting the growth of the regional demand. For instance, Walmart Inc. entered into a 5-year contract with Microsoft to accelerate digital transformation in retail using the latter’s cloud solution. North America is also home to several large-scale providers.
The Asia Pacific regional market is expected to register the highest CAGR of over 36.0% from 2019 to 2025. Small and medium enterprises in Asia Pacific countries, such as Japan, China, India, South Korea, and Taiwan, have realized the potential benefits of adopting private cloud server solutions for various business operations. The governments in countries, such as India and China, are particularly emphasizing on encouraging innovation and adopting hosted technologies on a larger scale to create a modern and technology-driven society. Such initiatives to encourage a hosted deployment are propelling the rapid growth of the Asia Pacific regional market. For instance, in October 2017, MSC Malaysia Implementation Council introduced the ‘Cloud First’ strategy in Malaysia. Similarly, in the Philippines, the government has announced the GovCloud initiative, which envisages a private cloud server system for government agencies to deploy payment gateways and email servers, among other web hosting applications.
The private cloud server market is a relatively concentrated but highly competitive market where the top-5 companies jointly accounted for the largest market share in 2018. New product developments, improvements to the existing product line, mergers & acquisitions, and strategic partnerships are some of the strategies being adopted by the key players to defend their respective market shares. For instance, in April 2019, Dell Inc. announced the Dell Technologies Cloud, a new set of cloud infrastructure solutions making hybrid cloud environment easier to deploy and manage. The Dell Technologies Cloud combines the power of VMware and Dell EMC infrastructure and removes complexities across public clouds and private clouds. Similarly, in July 2019, VMware, Inc. extended its strategic partnership with Google Cloud. The two companies announced Google Cloud VMware Solution by CloudSimple, a service that allows organizations to run their VMware workloads on Google Cloud Platform. Some of the prominent players in the private cloud server market include:
Cisco Systems Inc.
Hewlett Packard Enterprise Development LP
Market size value in 2020
USD 60.3 billion
Revenue forecast in 2025
USD $205.4 billion
CAGR of 29.6% from 2019 to 2025
Base year for estimation
2015 - 2017
2019 - 2025
Revenue in USD billion and CAGR from 2019 to 2025
Revenue forecast, company ranking, competitive landscape, growth factors, and trends
Hosting type, organization type, region
North America; Europe; Asia Pacific; Latin America; Middle East & Africa
U.S.; Canada; U.K.; Germany; India; China; Japan; Brazil; Mexico
Key companies profiled
VMware; Dell Inc.; Cisco Systems Inc.; Amazon.com, Inc.; Hewlett Packard Enterprise Development LP
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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 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global private cloud server market report on the basis of hosting type, organization type, and region:
Hosting Type Outlook (Revenue, USD Billion, 2015 - 2025)
Organization Type Outlook (Revenue, USD Billion, 2015 - 2025)
Regional Outlook (Revenue, USD Billion, 2015 - 2025)
Middle East & Africa
b. The global private cloud server market size was estimated at USD 43.4 billion in 2019 and is expected to reach USD 60.3 billion in 2020.
b. The global private cloud server market is expected to grow at a compound annual growth rate of 29.6% from 2019 to 2025 to reach USD 205.4 billion by 2025.
b. North America dominated the private cloud server market with a share of 47.6% in 2019. The U.S. has taken a lead in the implementation of private cloud server solutions owing to the growing volumes of transactions and subsequently the data at the organizations.
b. Some key players operating in the private cloud server market include VMware; Dell Inc.; Cisco Systems Inc.; Amazon.com, Inc.; and Hewlett Packard Enterprise Development LP.
b. Key factors that are driving the market growth include increasing concerns over data security and disaster recovery, and continued adoption of the bring your own device (BYOD) trend and growing deployment of a mobile workforce.
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