|
Forecast Period
|
2025-2029
|
|
Market Size (2023)
|
USD 510.82 Billion
|
|
CAGR (2024-2029)
|
15.27%
|
|
Fastest Growing Segment
|
Software-as-a-Service (SaaS)
|
|
Largest Market
|
North America
|
Market Overview
Global Public Cloud Market was valued at USD 510.82
Billion in 2023 and is anticipated to project robust growth in the forecast
period with a CAGR of 15.27% through 2029. Public cloud services have
transformed the way companies operate their IT budgets. The pay-as-you-go model
lets organizations access diverse services without incurring upfront costs for
Software and hardware. Traditionally, procuring and operating hardware meant
substantial investments, but the cloud's operational expenditure approach
changes the financial landscape. In confluence with this, the pay-as-you-go
pricing model benefits startups and small businesses with limited capital and
allows larger enterprises to optimize their IT spending. Apart from this, it
encourages experimentation, as companies try out new ideas without committing
to significant expenses, which provides an impetus to the market.
According to Thales Group, As of 2022, over 60
percent of all business data is stored in the cloud. As businesses
progressively move their resources into cloud environments to enhance security,
dependability, and business agility, this balance hit 30% in 2015 and has since
increased. These factors create a massive growth opportunity for the
market-studied vendors to expand their offerings in the coming years. The
growing adoption of cloud computing among enterprises also broadens the scope
of the studied market. For instance, India-based market vendor Druva Inc.
reported that many companies primarily target enterprise data due to a large
amount of unstructured data. The company also reported that this data claim
accounts for over 80% of the data stored in enterprise storage systems.
Key Market Drivers
Remote Work and Collaboration
Remote work and collaboration have emerged as
powerful drivers of the global public cloud market, reshaping the way
organizations operate and necessitating cloud-based solutions to support these
new paradigms. In a world where flexibility and connectivity are paramount, the
public cloud's influence on remote work and collaboration is profound. The
COVID-19 pandemic has been a catalyst for the widespread adoption of remote
work. With restrictions on physical office spaces and the need for social
distancing, organizations turned to public cloud services to swiftly transition
their operations to a remote setting. Public cloud platforms offer secure and
scalable solutions for virtual desktops, cloud-based productivity tools, and
communication applications, enabling employees to work from anywhere with an
internet connection. This flexibility has not only maintained business continuity
but has also fostered an environment where remote work can become a permanent
feature of the modern workplace.
Collaboration tools have also seen a surge in
demand, as distributed teams require efficient ways to communicate and
collaborate. Public cloud providers offer a plethora of tools for video
conferencing, document sharing, project management, and real-time
communication. The seamless integration of these services within the cloud
ecosystem enhances productivity and enables teams to work together seamlessly,
irrespective of geographical locations.
Moreover, the public cloud's scalability and global
reach ensure that remote work and collaboration can be extended to a global
scale. Organizations can deploy their applications and data closer to
international teams and clients, reducing latency and ensuring a consistent
user experience worldwide. As remote work and collaboration continue to
redefine the way we work, the global public cloud market will remain a critical
enabler of this transformation. Cloud providers will continue to innovate,
offering new features and services to meet the evolving needs of remote
workforces. This synergy between remote work and the public cloud underscores a
fundamental shift in how businesses function and interact, with cloud
technology serving as the linchpin of this new era of work.
Security and Compliance
Security and compliance are pivotal drivers of the
global public cloud market. As organizations increasingly transition to
cloud-based infrastructures, they place a paramount focus on safeguarding their
data and adhering to regulatory requirements. This emphasis on security and
compliance not only enhances trust in cloud services but also fuels the
continued growth of the global public cloud market. Security in the public
cloud is multifaceted. Cloud providers invest heavily in robust security
measures, including encryption, identity and access management, threat
detection, and security monitoring. Their expertise and resources allow them to
offer a level of security that is often difficult for individual organizations
to achieve in on-premises environments. The continuous development of security
features and services by cloud providers bolsters confidence in public cloud
solutions.
Moreover, compliance with industry-specific and
regional regulations is a critical concern for many businesses. Public cloud
providers have made significant efforts to meet these compliance requirements,
offering tools and documentation to help organizations adhere to relevant
standards, such as GDPR, HIPAA, or SOC 2. This support simplifies the often
complex task of staying compliant, making public cloud an attractive choice for
a wide range of industries, including healthcare, finance, and government. Security
and compliance are also closely interlinked. Public cloud services are
well-positioned to enhance security postures through features like automated
patch management, regular security updates, and compliance assessments. The
cloud's ability to provide centralized visibility and control over data and
access further bolsters security efforts. Additionally, cloud providers' robust
disaster recovery and business continuity services contribute to maintaining
compliance by ensuring data availability and integrity.
As data breaches and cyber threats become more
sophisticated, security and compliance remain at the forefront of
organizational priorities. The global public cloud market, with its advanced
security capabilities and comprehensive compliance support, is well-equipped to
address these concerns, making it a compelling choice for organizations seeking
to fortify their data protection and regulatory adherence. As a result, the
demand for public cloud services is expected to continue its ascent, driven by
the imperative need for secure, compliant, and scalable cloud solutions.
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Key Market Challenges
Compliance and Data Privacy
Compliance and data privacy issues have emerged as
significant challenges that have the potential to hamper the continued growth and
widespread adoption of the global public cloud market. While public cloud
services offer numerous benefits, including scalability and cost-efficiency,
organizations are increasingly grappling with the complexities and risks
associated with ensuring compliance with industry-specific regulations and
safeguarding data privacy. The impact of compliance and data privacy concerns
on the public cloud market is substantial and can be understood through the
following key points: Regulatory Complexity: Different industries and regions
have varying regulations and standards governing data storage, access, and
protection. Complying with these diverse requirements in a multi-cloud
environment can be daunting, leading to legal and financial consequences for
non-compliance.
Data Sovereignty: Many countries have data
sovereignty laws that require data to be stored within a specific geographic
jurisdiction. This can complicate data management for organizations using
public cloud services with global data centers. Data Access and Control:
Organizations are often concerned about maintaining control and access to their
data when it's stored on infrastructure managed by third-party cloud providers.
Ensuring that data remains secure and under the organization's control is a
paramount challenge. Vendor Responsibility Clarity: The shared responsibility
model in cloud computing, where both the provider and the customer have defined
roles in securing data, can be confusing. Misunderstanding this model can
result in compliance breaches and data privacy risks.
Data Encryption: Effective encryption of data at
rest and in transit is a critical aspect of data privacy and compliance.
Misconfigurations or weaknesses in encryption can expose sensitive data to
potential breaches. Data Loss Prevention: Preventing data loss, whether due to
accidental deletion, mismanagement, or cyber threats, is a constant concern for
organizations. Proper backup and data recovery strategies are crucial for
maintaining data integrity. Legal and Regulatory Changes: Ongoing updates and
changes in data protection laws, such as the General Data Protection Regulation
(GDPR) in Europe, require organizations to stay informed and adapt their
practices accordingly. This dynamic regulatory landscape can be challenging to
navigate.
Cross-Border Data Transfer: Data transfer across
borders can raise data privacy issues. Ensuring that data is protected during
cross-border transfers and that it complies with the regulations of all
relevant jurisdictions is a complex task. Third-Party Risk: When organizations
use third-party services or tools within the public cloud environment, they may
introduce additional compliance and privacy risks, as these services may not
adhere to the same standards. Auditing and Documentation: Maintaining clear and
comprehensive records of data handling practices, access permissions, and
security measures is essential for demonstrating compliance during audits.
Efforts to address compliance and data privacy
concerns are critical to ensuring that the public cloud market continues to
flourish. Cloud providers must continue enhancing their security and compliance
measures, offering tools and documentation to support customers in meeting
their compliance needs. Simultaneously, organizations must implement robust
data governance, privacy, and security strategies, including clear data access
controls, encryption, and auditing processes, to mitigate these challenges and foster
trust in the public cloud. Compliance with evolving regulations and data
protection standards is vital for the sustainable growth of the global public
cloud market.
Security Concerns
Security concerns represent a persistent challenge
within the global public cloud market, potentially impeding its continued
growth and adoption. While public cloud services offer numerous advantages,
including scalability, cost-efficiency, and flexibility, organizations and
individuals remain apprehensive about the security of their data and
applications in the cloud. Addressing these concerns is crucial to ensuring the
continued expansion of the public cloud market. The impact of security concerns
on the public cloud market can be understood through the following points, Data
Breaches and Unauthorized Access: High-profile data breaches and incidents of
unauthorized access to sensitive information have raised alarm about the
security of data stored in the cloud. These incidents can result in substantial
financial losses and damage to an organization's reputation.
Compliance and Regulatory Requirements: Different
industries and regions have specific compliance and data protection
requirements. Meeting these standards in the cloud can be challenging, and
non-compliance can lead to legal consequences and financial penalties. Data
Loss and Availability: The risk of data loss or unavailability in the cloud due
to factors such as cloud provider outages or misconfiguration can disrupt
business operations and cause productivity losses.
Insider Threats: Concerns about internal security
threats, including employee misuse or misappropriation of data, are a
significant worry. Proper access control and monitoring are essential to
mitigate these risks. Encryption and Data Privacy: Encrypting data in transit
and at rest is vital for data security, and concerns persist about the
effectiveness of encryption measures, especially in multi-tenant environments. Shared
Responsibility Model: The shared responsibility model in cloud computing means
that both cloud providers and customers have roles in securing data.
Understanding and correctly implementing this model can be a challenge for
users.
Complexity of Identity and Access Management (IAM):
Managing user access and permissions within a complex cloud environment can be
daunting. IAM misconfigurations can lead to security breaches. Phishing and
Social Engineering: Cybercriminals frequently employ social engineering
tactics, such as phishing, to gain unauthorized access to cloud accounts. User
education and robust email filtering are critical for combating these threats.
Vendor Lock-In: Once an organization commits to a
particular cloud provider, they may face challenges migrating to another
provider due to security-related concerns, compatibility issues, and data
integration complexities. It is crucial to emphasize that cloud providers
invest heavily in security measures, such as firewalls, encryption, threat
detection, and regular security updates. They also provide tools and resources
to help customers bolster their security. However, organizations must also play
an active role in ensuring their data and applications are secure in the cloud.
To address security concerns effectively and
encourage further growth in the public cloud market, cloud providers must
continue enhancing their security measures and transparency in their practices.
Additionally, organizations must adopt robust security strategies that include
best practices in access control, encryption, monitoring, and incident
response. By collaborating and staying vigilant, both cloud providers and users
can work towards mitigating security concerns and fostering trust in the public
cloud.
Data Transfer Costs
Data transfer costs are a significant concern
within the global public cloud market, potentially posing challenges to its
continued growth and adoption. While public cloud services offer numerous
advantages, including scalability, cost-efficiency, and flexibility, data
transfer costs can add a substantial financial burden and complexity for
organizations. These costs encompass both ingress (data entering the cloud) and
egress (data leaving the cloud), and they can be a key factor in cloud
expenditure management.
The impact of data transfer costs on the public
cloud market can be understood through the following considerations: Cost
Accumulation: Data transfer costs can accumulate rapidly, particularly for
businesses with large datasets or high data movement requirements. For
organizations that handle extensive data, these charges can become a
significant part of their overall cloud spending, potentially reducing the
cost-effectiveness of cloud adoption. Unpredictability: Predicting data
transfer costs accurately can be challenging. Fluctuating data needs or
unexpected data movement can lead to unpredictable cost spikes, making it
difficult for organizations to budget effectively.
Latency and Performance: Data transfer costs can
deter businesses from optimizing data access and performance in real-time.
Concerns about cost may lead organizations to restrict data transfers,
potentially impacting application performance and user experience. Vendor
Pricing Variability: Different cloud providers have varying pricing models for
data transfer, making it complex for organizations to compare and choose the
most cost-effective option. This variability can lead to confusion and suboptimal
cost management. Migrations and Backup Costs: Data migrations and backup
operations can incur substantial data transfer expenses. These are often
necessary for data management, disaster recovery, and application scaling but
can drive up costs. Hybrid and Multi-Cloud Challenges: Organizations that
operate in hybrid or multi-cloud environments may experience higher data
transfer costs when moving data between different cloud providers or between
on-premises and cloud resources.
While data transfer costs are a concern, it's
essential to acknowledge that cloud providers are continually working to
address this issue. Some providers offer free or reduced-cost data transfers
within their ecosystem to incentivize users to keep their data within their
platform. Additionally, organizations can implement strategies to mitigate data
transfer costs, such as optimizing data storage, implementing data caching, and
using content delivery networks (CDNs) to reduce egress costs. The global
public cloud market is unlikely to be hampered significantly by data transfer
costs, as the benefits of cloud services are substantial. However, cost
considerations remain an important factor in cloud adoption, and organizations
must be vigilant in managing and optimizing their data transfer expenses to
make the most of the cloud's advantages while minimizing financial burdens.
Cloud providers also have a role to play in ensuring transparent and
competitive pricing models to address this concern effectively.
Key Market Trends
AI and Machine Learning Services
AI and machine learning services are poised to be
significant drivers of the global public cloud market, underpinning its
continued growth and innovation. As organizations increasingly seek to harness
the power of artificial intelligence and machine learning for data analytics,
automation, and intelligent applications, cloud providers are at the forefront
of delivering the necessary infrastructure and tools. Several key factors
highlight the role of AI and machine learning services in propelling the public
cloud market: Accessibility: Public cloud platforms provide accessible and
scalable AI and machine learning services, democratizing advanced technologies
that were once limited to enterprises with substantial resources. Small and
mid-sized businesses can now tap into the capabilities of AI and machine
learning to enhance their operations.
Innovation: Cloud providers continually invest in
AI and machine learning research and development, offering a rich ecosystem of
services, including machine learning models, natural language processing,
computer vision, and data analytics tools. This fosters innovation across
industries, from healthcare and finance to retail and manufacturing. Scalability:
The scalability of the cloud is pivotal for AI and machine learning workloads,
which often require substantial computational power and data storage. Cloud
services enable organizations to scale resources up or down as needed,
optimizing performance and cost-efficiency.
Data Management: Public cloud providers offer
robust data storage, management, and processing capabilities, which are
essential for AI and machine learning projects that rely on vast datasets. This
makes it easier for organizations to collect, store, and analyze data at scale.
Integration: Cloud providers facilitate seamless integration of AI and machine
learning capabilities with existing applications and workflows, enabling
organizations to enhance their software with intelligent features and insights.
Cost Efficiency: AI and machine learning on the cloud follow a pay-as-you-go
model, eliminating the need for significant upfront investments in hardware and
software. Organizations can leverage these services cost-effectively and only
pay for what they use.
AI-Powered Services: Cloud providers offer
AI-powered services like chatbots, recommendation engines, and predictive
analytics, enabling organizations to improve customer experiences and drive
business efficiency. In summary, AI and machine learning services in the public
cloud are transforming the way businesses operate, innovate, and leverage
data-driven insights. As these services become more sophisticated and
accessible, they are likely to play a central role in driving the growth and
evolution of the global public cloud market, offering organizations a
competitive edge in a data-driven world.
Edge Computing Integration
Edge computing integration is emerging as a
powerful driver of the global public cloud market, propelling it to new heights
by redefining how data is processed, analyzed, and managed. This trend
signifies a significant shift in the cloud computing landscape, as public cloud
providers extend their services to the edge of networks, enabling real-time
data processing and enhancing the capabilities of various applications and
industries.
Key factors highlight the role of edge computing
integration in fueling the public cloud market: Real-Time Processing: Edge
computing allows data to be processed closer to its source, reducing latency
and enabling applications that require immediate responses. Public cloud
providers extend their services to edge locations, ensuring that data processing
is efficient and responsive. IoT and Industry 4.0: The proliferation of IoT
devices and the advent of Industry 4.0 are driving the demand for edge
computing. Cloud providers are positioned to offer edge solutions that manage
and analyze data generated by these connected devices in industries like
manufacturing, healthcare, and transportation. Scalability: Public cloud
platforms excel at providing scalable resources, and this is equally important
in edge computing scenarios. Cloud providers can quickly scale edge resources
to accommodate fluctuating data volumes and workloads.
Security and Data Privacy: Edge computing addresses
security and data privacy concerns by keeping sensitive data closer to its
source, reducing the need for extensive data transfer over the internet. Cloud
providers integrate security measures to safeguard data at both the edge and
the core. AI and Machine Learning: Edge computing and AI integration enables
real-time, on-device inference, enhancing the intelligence of edge devices.
Public cloud providers offer AI services that support edge applications, such
as image recognition and predictive maintenance.
Enhanced User Experience: Edge computing, when
combined with public cloud resources, provides a seamless and responsive user
experience, particularly for applications like augmented reality, gaming, and
video streaming. Reliability and Redundancy: Cloud providers leverage their
extensive infrastructure to ensure the reliability and redundancy of edge
computing services, minimizing downtime and data loss. In conclusion, the
integration of edge computing with public cloud services empowers organizations
to harness the potential of real-time data processing and analytics. This trend
opens up new possibilities for innovation across various sectors and reinforces
the importance of the public cloud in supporting edge computing applications.
As the demand for edge solutions grows, it is likely to be a driving force in
the expansion of the global public cloud market.
Segmental Insights
Deployment Insights
Software-as-a-Service
(SaaS) is expected to hold the largest share of Public Cloud market for during
the forecast period, Software as a service (SaaS) is a cloud-based model in
which a cloud provider develops applications and makes them available to end
users over the internet. An independent software vendor (ISV) may contract a
third-party cloud provider to host the application in this model. SaaS
applications include a billing invoicing system, Customer Relationship
Management (CRM), help desk, and Human Resource solutions. Organizations are
deploying the SaaS model to utilize multiple advantages, including the reduced
upfront costs of commercial software, the need to establish software on
individual machines, service scalability with a firm's growth, integrations
with other software applications, and instant updates to all users. For
instance, Dropbox is a real example of SaaS. Cloud storage allows firms to
store, share, and collaborate on files and data. The users can sync and back up
files to access them from any device.
The players from various industries are acquiring the market players to
expand their presence and enter new markets. For instance, in September 2022,
Lyve Global, an Abu Dhabi-based B2B logistics SaaS platform, announced the
acquisition of Shopini World, a cross-border e-commerce logistics and solutions
provider, to expand its business across the Middle East and North Africa
region. The players in the market are looking for strategic acquisitions and
mergers to expand their offerings and cater to the rising demand for SaaS in
the country.
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Regional Insights
North America is expected to dominate the market
during the forecast period. North America is among the leading innovators and
pioneers in adopting public cloud. The region has a strong foothold of cloud
microservice vendors, which adds to the market's growth. Some include Amazon
Web Services Inc., Oracle Corporation, IBM Corporation, and Microsoft
Corporation. Due to the growing adoption of advanced technologies, this region
is gaining traction in the cloud microservices market. Moreover, there is an
increasing demand from North American firms, as they have adopted public cloud
architecture in financial, e-commerce, and travel services, which helps store
information and data cost-effectively and boosts agility, efficiency, and
scalability. The use of developed technologies, such as cloud computing, AI,
big data and analytics, mobility/social media, cybersecurity, and IoT, among
others, has led to innovation and transformation, thereby stimulating growth in
the business ecosystem of North America.
According to a report published by Stormforge, 18%
of respondents from North America state that their organization has a monthly
cloud spend that ranges between USD 100,000 and USD 250,000. Further, 44% of
respondents expect cloud spending to increase somewhat over the next 12 months,
while another 32% indicate that they expect their organization's cloud spending
to increase significantly over the next 12 months. The United States is one of
the major countries in North America, and such huge spending on the cloud would
create an opportunity for the studied market to grow.
Recent Developments
- In April 2023, VMware, Inc. announced VMware
Cross-Cloud managed services, a set of prescriptive recommendations with
improved partner and consumer benefits that will enable highly skilled members
to grow their managed services practices. Building on VMware’s conquest in
creating an ecosystem of more than 4,000 cloud service players that serve tens
of thousands of clients worldwide, VMware Cross-Cloud managed services will
make facility-managed services faster for partners and easier to consume by
clients. This will enhance partner profitability while opening new
possibilities for growth and expansion.
- In October 2022, Google Cloud announced that
Wayfair, one of the world's most prominent online destinations for the home,
has completed migrating its data center services and applications to the cloud,
with Google Cloud as the basis of its overall cloud strategy. The move enables
the retailer to increase enterprise agility and technical innovation, manage
burst capacity, and scale new uses of machine learning (ML) and artificial
intelligence (AI) for scenarios ranging from fraud detection to personalized customer
outreach.
Key Market Players
- Amazon
Web Services Inc. (AMAZON.COM, Inc.)
- Alibaba
Cloud (Alibaba Group Holding Limited)
- Google
LLC (Alphabet Inc.)
- Microsoft
Corporation
- Oracle
Corporation
- SAP SE
- IBM
Corporation
- Salesforce
Inc.
- Vmware
Inc.
- Adobe
Inc.
|
By Deployment
|
By Organization size
|
By End-user Industry
|
By Region
|
|
- software-as-a-service (SaaS)
- platform-as-a-service (PaaS)
- infrastructure-as-a-service (IaaS)
|
- SME's Enterprise
- large Enetrprise
|
- BFSI
- Healthcare
- Government
- Manufacturing
- IT and telecom
|
- North America
- Europe
- South America
- Middle East & Africa
- Asia Pacific
|
|
Report Scope:
In this report, the Global Public Cloud Market has
been segmented into the following categories, in addition to the industry
trends which have also been detailed below:
- Public Cloud Market, By
Deployment:
o
software-as-a-service
(SaaS)
o
platform-as-a-service
(PaaS)
o
infrastructure-as-a-service
(IaaS)
- Public Cloud Market, By organization size:
o
SME's
Enterprise
o
large
Enterprise
- Public Cloud Market, By End-user Industry:
o BFSI
o Healthcare
o Government
o Manufacturing
o IT and telecom
- Global Public Cloud Market,
By Region:
o North America
§ United States
§ Canada
§ Mexico
o Asia-Pacific
§ China
§ India
§ Japan
§ South Korea
§ Indonesia
o Europe
§ Germany
§ United Kingdom
§ France
§ Russia
§ Spain
o South America
§ Brazil
§ Argentina
o Middle East & Africa
§ Saudi Arabia
§ South Africa
§ Egypt
§ UAE
§ Israel
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents
in the Global Public Cloud Market.
Available Customizations:
Global Public Cloud Market report with the given
market data, Tech Sci Research offers customizations according to a company's
specific needs. The following customization options are available for the
report:
Company Information
- Detailed analysis and
profiling of additional market players (up to five).
Global Public Cloud Market is an upcoming report to
be released soon. If you wish an early delivery of this report or want to
confirm the date of release, please contact us at [email protected]