Global Cloud Services Market Size

The global cloud services market is expected to experience significant growth in the coming years, with a projected value of $927.51 billion by 2027. This represents a compound annual growth rate of 16.4% from 2020 to 2027, following a market value of $264.8 billion in 2019. One of the main drivers of this growth is the cost benefits offered by cloud services compared to traditional physical storage. It is estimated that using cloud services can save up to 35% of annual operational costs. The market is also at an evolving stage, with plenty of potential for further growth.

Key Findings

The IaaS segment currently leads the cloud services market by service type, but the SaaS segment is expected to see significant growth during the forecast period. In terms of cloud type, the hybrid cloud segment was the dominant player in 2019, but the public cloud segment is expected to experience significant growth in the future. When considering enterprise size, large enterprises dominated the cloud services market in 2019, but small and medium enterprises are expected to see significant growth in the coming years. In terms of industry vertical, the BFSI sector generated the most revenue in 2019, but the healthcare sector is expected to experience significant growth in the near future. In terms of geography, the Asia-Pacific region is expected to see significant growth in terms of CAGR in the coming years.

Service Insights

In 2021, the Software as a Service (SaaS) segment accounted for over 54% of revenue in the cloud services market. This can be attributed to the flexibility, easy maintenance, and easy deployment offered by SaaS products. There has been a trend of companies moving to the cloud, with 73% of enterprises shifting most of their applications to the SaaS platform. The increased demand for remote work has also led to a surge in demand for SaaS services that allow collaborative teams to access formerly centralized data and analytics.

SaaS products are expected to experience strong growth in the coming years due to their Total Cost of Ownership (TCO) being comparable to on-premise deployment models. The increasing number of businesses offering cloud-based services and the growing preference for SaaS delivery models are expected to drive SaaS segment growth throughout the forecast period. The SaaS delivery model offers a pay-as-you-go model that gives organizations greater flexibility and options, as well as web-based subscriptions that allow for remote access to the software. This model is particularly effective at delivering software solutions that can reach a wide audience.

Deployment Insights

In 2021, the private deployment segment accounted for over 46% of the revenue in the cloud computing market. Private clouds provide computing capabilities over a private network or the internet and are available to a small group of users rather than the general public. They offer several advantages for enterprises, including scalability, self-service, and elasticity, as well as the ability to customize and control the hosting on on-premise computer infrastructure. Private clouds also offer a higher level of privacy and security, as they use internal hosting and firewalls to ensure high-level data protection. These features make private clouds particularly appealing to third-party providers.

Enterprise Size Insights

In 2021, the large enterprises segment accounted for the largest share of the cloud computing market, at over 51.5%. This can be attributed to the lower operating expenses, improved collaboration, increased flexibility, and faster time to market offered by cloud computing. These features allow businesses to delegate routine tasks to technology that can handle them more efficiently, which is expected to drive growth in the segment. Additionally, the increasing number of large enterprises in both developed and emerging countries is expected to drive demand for cloud computing services over the forecast period.

The Small and Medium Enterprises (SMEs) segment is expected to be the fastest-growing segment during the forecast period. This can be attributed to the increasing number of SMEs in emerging markets like China and India, as well as the growing demand for cloud computing services among SMEs to streamline workflow and reduce operational costs. Cloud computing can help SMEs reduce costs, eliminate repetitive tasks, prioritize work, and improve team collaboration, which is expected to drive adoption within the segment in the coming years.

End-use Insights

In 2021, the BFSI (Banking, Financial Services, and Insurance) segment accounted for the largest share of revenue in the cloud computing market, at over 25%. This can be attributed to the increase in online banking activity in the BFSI sector, which has prompted financial institutions to embrace digital transformation, with cloud computing playing a key role. Cloud computing has helped firms in the BFSI sector reduce costs, encourage innovation, strengthen customer relationships, and increase flexibility.