Bare Metal Cloud Market by Service Type (Compute, Networking, Database, Security, Storage, Managed), Organization Size (Large, SMEs), Vertical (BFSI, Healthcare & Life Sciences, Manufacturing) and Region - Global Forecast to 2028
[220 Pages Report] The bare metal cloud market size is expected to grow from USD 8.5 billion in 2023 to USD 19.1 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 17.4% during the forecast period. The emergence of bare metal cloud services represents a pivotal shift in cloud computing, driven by the evolving demands of businesses and organizations. Unlike traditional virtualized cloud instances, bare metal cloud services provide dedicated physical servers, offering a compelling solution for workloads requiring high performance, low latency, and uncompromising control. This evolution has been spurred by the rising adoption of data-intensive technologies such as AI, IoT, and big data analytics, which demand raw computing power. Bare metal cloud services have become an essential part of the cloud ecosystem, offering an alternative to traditional virtualized cloud instances for businesses with specific performance, security, and control requirements. The evolution of bare metal cloud services reflects the ongoing shift toward more specialized and customizable cloud infrastructure options.
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Recession Impact on the Bare Metal Cloud Market
The global recession caused by factors such as the Russia-Ukraine war, the pandemic, inflation, rising interest rates, and oil prices has reduced organizations’ spending on cloud services, which may impact the demand for bare metal cloud services in the short run. The ongoing recession, the Russia-Ukraine conflict, rising oil prices, and the global COVID-19 pandemic have significantly shaped the bare metal cloud market landscape. These events can influence numerous market aspects, including adoption rates, customer priorities, and vendor strategies. Recessions can drive companies to shift from capital expenditures (CapEx) to operational expenditures (OpEx) to manage costs better. Cloud services, including bare metal cloud, can align with this shift. In addition, the Russia-Ukraine war might impact the supply chains, including the availability of hardware components required for bare metal cloud infrastructure. This could affect the provisioning and expansion of bare metal cloud services.
Bare Metal Cloud Market Dynamics
Driver: Need for high-performance computing to support resource-intensive applications
The surging demand for high-performance computing (HPC) is a driving force behind the rapid expansion of the bare metal cloud market, with the adoption of applications such as complex simulations, scientific research, AI/ML model training, and real-time data analytics, demand substantial computational power, memory, and I/O throughput. According to a report by MarketsandMarkets, the global HPC market is projected to grow from USD 37.8 billion in 2020 to USD 49.4 billion by 2025, indicating the escalating need for computational power across industries. Furthermore, the emergence of edge computing, driven by the Internet of Things (IoT), intensifies the requirement for localized, high-performance data processing, pushing the edge computing market. The bare metal cloud market is forecasted to grow substantially in response to these trends. High-performance computing is shaping the trajectory of the bare metal cloud market as organizations increasingly seek dedicated and robust hardware solutions to cater to resource-intensive workloads and capitalize on the performance advantages offered by bare metal cloud services.
Restraint: Stringent cloud regulations
The growth trajectory of the bare metal cloud market is encountering hurdles due to the prevalence of stringent cloud regulations. While bare metal cloud solutions offer performance advantages, the complex data protection and compliance landscape hinders its wider adoption. In the financial sector, for instance, where regulatory requirements like the European Union’s MiFID II and the Dodd-Frank Act demand robust data controls, 69% of financial firms find it challenging to implement cloud solutions that align with these regulations, as reported by Druva’s 2021 Ransomware and Cloud Data Security Survey. Similarly, the healthcare industry faces obstacles; a survey by HIMSS found that 44% of healthcare IT professionals consider regulatory compliance a barrier to cloud adoption. These statistics depict the impact of stringent regulations on specific industries. As organizations struggle to navigate the intricate network of compliance regulations, the expansion of the bare metal cloud market could be restricted. This situation underscores the necessity for customized solutions that simultaneously cater to performance prerequisites and regulatory obligations.
Opportunity: Growing adoption of edge computing infrastructure for real-time data processing
Edge computing presents significant opportunities for adopting bare metal cloud solutions, revolutionizing how organizations process data at the network’s edge. As the Internet of Things (IoT) and real-time applications increase, the need for rapid data processing closer to data sources has become paramount. This is where edge computing comes into play, enabling quicker decision-making, reduced latency, and enhanced user experiences. Bare metal cloud, with its dedicated physical servers and high-performance characteristics, aligns seamlessly with the requirements of edge computing. By offering localized processing power without the virtualization overhead, the bare metal cloud supports the resource-intensive demands of edge applications, ensuring swift data analysis and responses. Industries such as manufacturing, retail, and healthcare, where immediate insights and actions are crucial, stand to benefit immensely from this synergy. The ability of the bare metal cloud to deliver unparalleled performance at the edge while maintaining the scalability and management advantages of cloud services positions it as a powerful enabler for the expanding landscape of edge computing applications.
Challenge: Lack of isolation in multi-tenant environments
The absence of effective isolation in multi-tenant environments poses a significant challenge in adopting bare metal cloud services. The risk of security breaches and unauthorized data access increases substantially in a bare metal cloud setup lacking proper isolation mechanisms. Moreover, the performance predictability of bare metal servers, a key driver for adoption, is compromised, as evidenced by an average 30% degradation in performance due to interference from co-located workloads as per the TechCloud Performance Report, 2020. As industries fight with stringent compliance mandates, the inadequacy of isolation exposes organizations to potential violations. This challenge underscores the pressing need for bare metal cloud providers to implement robust isolation measures that safeguard data, ensure consistent performance, and instill confidence among enterprises considering this technology for their mission-critical workloads.
The Bare Metal Cloud market Ecosystem
The SME segment is projected to witness the highest CAGR during the forecast period based on organization size.
SMEs look forward to adopting the cloud and analytics to improve operations and become more efficient. SMEs often lack the resources for extensive in-house data centers and infrastructure management. Thus, small and medium-sized enterprises (SMEs) increasingly recognize the need for bare metal cloud solutions to address their unique IT requirements. These businesses often face resource-intensive workloads, stringent security demands, and cost constraints. The bare metal cloud offers SMEs dedicated physical servers, ensuring consistent performance without the virtualization overhead, making it ideal for mission-critical applications and data-sensitive tasks. Additionally, the flexibility to scale resources up or down as needed, combined with predictable pricing models, enables SMEs to optimize their IT budgets effectively. In a rapidly evolving digital landscape, the bare metal cloud empowers SMEs to compete effectively, ensuring high performance, reliability, and cost-efficiency for their IT operations.
By Vertical, the retail & consumer goods segment is expected to grow at the second-highest CAGR during the forecast period.
The retail and consumer goods industry is witnessing a substantial uptake of bare metal cloud technology, revolutionizing how businesses operate and serve their customers. Retail giants such as Amazon and Walmart have embraced bare metal cloud solutions to bolster their eCommerce platforms and streamline their supply chain operations. Amazon’s utilization of bare metal cloud servers has allowed them to efficiently handle the surges in web traffic during major sales events, ensuring uninterrupted shopping experiences for millions of customers. Moreover, the enhanced performance and security provided by the bare metal cloud help organizations safeguard customer data and enable personalized shopping experiences. As retailers continue to harness the power of data analytics and AI-driven applications, the bare metal cloud’s flexibility and scalability are essential in delivering the seamless and responsive services that modern consumers expect.
Based on Region, North America is expected to hold the largest market share during the forecast period.
The market in North America is experiencing robust growth driven by a convergence of factors. One key driver is the region’s insatiable appetite for high-performance computing (HPC) resources, as exemplified by research institutions and academic organizations necessitating robust infrastructure for scientific simulations and data analysis. In May 2023, Applied Digital Corporation, a company specializing in creating and managing advanced digital infrastructure tailored for (HPC) applications across North America, unveiled its new AI Cloud offerings. These services are designed to deliver high-performance computing capabilities for a wide range of AI applications, encompassing tasks such as extensive language model training and graphics rendering. Concurrently, the adoption of cutting-edge technologies such as AI and ML is accelerating, with North America accounting for a significant share of global AI software revenue. In addition, Government investments in hybrid and multi-cloud solutions in North America are on the rise, reflecting the public sector’s commitment to modernizing its IT infrastructure, enhancing services, and improving cost efficiency. The Canadian government has implemented a Cloud First policy, promoting the use of cloud solutions, including hybrid and multi-cloud, to enhance the delivery of digital services. This policy has led to investments in hybrid cloud architectures to meet the demands of various government departments. This is expected to drive the bare metal cloud market in the region.
Key Market Players
The bare metal cloud market is dominated by a few globally established players such as IBM (US), Oracle (US), AWS (US), Lumen (US), and Rackspace (US), among others, are the key vendors that secured bare metal cloud contracts in last few years. Driven by increased disposable incomes, easy access to knowledge, and fast adoption of technological products, buyers are more willing to experiment/test new things in the bare metal cloud market.
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Report Metrics |
Details |
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Market size available for years |
2018–2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD Million/Billion) |
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Segments Covered |
Service Type, Organization Size, Vertical, and Region. |
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Regions covered |
North America, Europe, Asia Pacific, Middle East & Africa, and Latin America |
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Companies covered |
IBM (US), Oracle (US), AWS (US), Lumen (US), Rackspace (US), Internap (US), Dell (US), Equinix (US), Google (US), Microsoft (US), Alibaba Cloud (China), Scaleway (France), Joyent (US), HPE (US), OVHcloud (France), Limestone Networks (US), GoDaddy (US), phoenixNAP (US), Hetzner (Germany), Huawei Cloud (China), Pure Storage (US), DartPoints (US), Bigstep (UK), Oman Data Park (UK), Gcore (Luxembourg), Zenlayer (US), Vultr (US), RedSwitches (US), HostinRaja (India), Cherry Servers (Lithuania), and Cox Edge (US). |
This research report categorizes the bare metal cloud market to forecast revenue and analyze trends in each of the following submarkets:
Based on Service Type:
- Compute Services
- Networking Services
- Database Services
- Security Services
- Storage Services
- Managed Services
- Other Service Type
Based on Organization Size:
- Large Enterprises
- SMEs
Based on Vertical:
- BFSI
- Retail & Consumer Goods
- IT & ITeS
- Telecommunications
- Healthcare & Life Sciences
- Manufacturing
- Media & Entertainment
- Government
- Other Verticals
Based on Region:
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North America
- US
- Canada
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Europe
- UK
- Germany
- France
- Rest of Europe
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Asia Pacific
- China
- Japan
- India
- Rest of Asia Pacific
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Middle East & Africa
- KSA
- UAE
- Rest of Middle East & Africa
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Latin America
- Brazil
- Mexico
- Rest of Latin America
Recent Developments:
- In September 2023, New SmartNIC introduced enhancements to IBM Cloud Bare Metal Servers VPC. It integrated with a customer’s complete IBM Cloud Virtual Private Cloud (VPC) environment. It offered identical networking, storage, and Platform as a Service (PaaS) capabilities as IBM Cloud Virtual Servers within the VPC. Provisioning bare metal servers would be aligned with providing virtual servers, simplifying automation, and enhancing usability.
- In March 2022, Oracle introduced 11 new computing services, including computing, networking, and storage services and capabilities that enable customers to run their workloads faster and more securely at lower costs. The OCI compute services include container instances, AMD E4, Dense Compute Instances, and Oracle Cloud VMware Solution on AMD. The OCI network services included Flexible Web Application Firewall, Web Application Acceleration, Network Visualizer, and vTAP, and storage services included Flexible Block Volumes with Performance-based Auto-tuning and High Availability ZFS.
- In November 2022, Amazon EC2 M6i and C6i bare metal instances were introduced, powered by 3rd-generation Intel Xeon Scalable processors (code-named Ice Lake). These instances were suitable for various types of workloads. M6i was designed for web and application servers, backend servers supporting enterprise applications, gaming servers, caching fleets, and application development environments. C6i instances are designed for compute-intensive applications like batch processing, distributed analytics, HPC, ad serving, highly scalable multiplayer gaming, and video encoding.
- In February 2021, Lumen partnered with VMware to interconnect the VMware Tanzu Basic edition with the Lumen Edge bare metal service, enabling businesses to create a secure software supply chain to rapidly deploy new edge-native workloads with resilient edge computing solutions to drive the next wave of digital innovation.
Frequently Asked Questions (FAQ):
What is a bare metal cloud?
A bare metal cloud designates a service that can provision bare metal servers with varied capabilities (compute, storage, and network) to customers on demand through a cloud pay-as-you-go model. Bare metal cloud provides the customer access to a dedicated server without virtualization. The absence of virtualization allows access to the server’s direct hardware processing power, with the ability to provision workloads—without the overhead of the virtualization layer.
Which country is the early adopter of bare metal cloud?
The US is at the initial stage of adopting bare metal cloud.
Which are the key vendors exploring the bare metal cloud market?
Some of the major vendors offering bare metal cloud across the globe include IBM (US), Oracle (US), AWS (US), Lumen (US), Rackspace (US), Internap (US), Dell (US), Equinix (US), Google (US), Microsoft (US), Alibaba Cloud (China), Scaleway (France), Joyent (US), HPE (US), OVHcloud (France), Limestone Networks (US), GoDaddy (US), phoenixNAP (US), Hetzner (Germany), Huawei Cloud (China), Pure Storage (US), DartPoints (US), Bigstep (UK), Oman Data Park (UK), Gcore (Luxembourg), Zenlayer (US), Vultr (US), RedSwitches (US), HostinRaja (India), Cherry Servers (Lithuania), and Cox Edge (US).
What is the total CAGR expected to be recorded for the Bare metal cloud market during 2023-2028?
The Bare metal cloud market is expected to record a CAGR of 17.4% from 2023-2028
What is the projected market value of the bare metal cloud market?
The bare metal cloud market size is expected to grow from USD 8.5 billion in 2023 to USD 19.1 billion by 2028 at a Compound Annual Growth Rate (CAGR) of 17.4% during the forecast period.
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The study involved four major activities in estimating the current market size of the bare metal cloud market. Did extensive secondary research to collect information on the market, the competitive market, and the parent market. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. After that, the market breakup and data triangulation procedures were used to estimate the market size of the various segments in the bare metal cloud market.
Secondary Research
This research study used extensive secondary sources, directories, and databases, such as D&B Hoovers, DiscoverOrg, Factiva, vendor data sheets, product demos, Cloud Computing Association (CCA), Vendor Surveys, Asia Cloud Computing Association, and The Software Alliance. All these sources were referred to for identifying and collecting valuable information for this technical, market-oriented, and commercial study of the bare metal cloud market.
Primary Research
Primary sources were several industry experts from the core and related industries, preferred software providers, hardware manufacturers, distributors, service providers, technology developers, alliances, and organizations related to all segments of the industry’s value chain. In-depth interviews were conducted with various primary respondents, including key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, to obtain and verify critical qualitative and quantitative information and assess the market’s prospects.
Primary interviews were conducted to gather insights, such as market statistics, the latest trends disrupting the market, new use cases implemented, data on revenue collected from products and services, market breakups, market size estimations, market forecasts, and data triangulation. Primary research also helped understand various technology trends, segmentation types, industry trends, and regions. Demand-side stakeholders, such as Chief Information Officers (CIOs), Chief Technology Officers (CTOs), Chief Security Officers (CSOs), the installation teams of governments/end users using bare metal cloud services, and digital initiatives project teams were interviewed to understand the buyer’s perspective on suppliers, products, service providers, and their current use of services, which would affect the overall bare metal cloud market.
Breakup of Primary Profiles:
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Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and forecast the bare metal cloud market and other dependent submarkets. The bottom-up procedure was deployed to arrive at the overall market size using the revenues and offerings of key companies in the market. With data triangulation methods and validation through primary interviews, this study determined and confirmed the exact value of the overall parent market size. The overall market size was then used in the top-down procedure to estimate the size of other individual markets via percentage splits of the market segments.
The top-down and bottom-up approaches were used to estimate and validate the bare metal cloud market size and various other dependent subsegments.
The research methodology used to estimate the market size included the following details:
- The key players in the market were identified through secondary research, and their revenue contributions in the respective countries were determined through primary and secondary research.
- This entire procedure included studying top market players’ annual and financial reports and extensive interviews for key insights from industry leaders, such as Chief Executive Officers (CEOs), VPs, directors, and marketing executives.
- All percentage splits and breakups were determined using secondary sources and verified through primary sources.
All the possible parameters that affect the market covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to get the final quantitative and qualitative data. This data is consolidated and added with detailed inputs and analysis from MarketsandMarkets.
Bare metal cloud market: Top-down and bottom-up approaches
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Data Triangulation
The market was split into several segments and subsegments after arriving at the overall market size—using the market size estimation processes as explained above. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, data triangulation and market breakup procedures were employed, wherever applicable. The data was triangulated by studying several factors and trends from both the demand and supply sides in the bare metal cloud market.
Market Definition
According to MarketsandMarkets, a bare metal cloud designates a service that can provision bare metal servers with varied capabilities (compute, storage, and network) to customers on demand through a cloud pay-as-you-go model. Bare metal cloud provides the customer access to a dedicated server without virtualization. The absence of virtualization allows access to the server’s direct hardware processing power, with the ability to provision workloads—without the overhead of the virtualization layer.
Key Stakeholders
- Technology service providers
- Bare metal cloud vendors
- Colocation providers
- Government organizations
- Networking companies
- Consultants/consultancies/advisory firms
- Support and maintenance service providers
- Telecom service providers
- Information technology (IT) infrastructure providers
- System Integrators (SIs)
- Regional associations
- Independent software vendors (ISVs)
- Value-added resellers and distributors
Report Objectives
- To define, describe, and forecast the bare metal cloud market by service type, organization size, vertical, and region
- To provide detailed information about the major factors (drivers, restraints, opportunities, and industry-specific challenges) influencing the growth of the bare metal cloud market
- To analyze the market with respect to individual growth trends, prospects, and contributions to the overall market
- To forecast the market size of five main regions: North America, Europe, Asia Pacific (APAC), Middle East & Africa (MEA), and Latin America
- To analyze the opportunities in the market for stakeholders by identifying the high-growth segments of the market
- To profile the key players in the market and comprehensively analyze their core competencies in each subsegment
- To analyze the competitive developments, such as partnerships, acquisitions, and product/solution launches and enhancements, in the bare metal cloud market
- To analyze the impact of the recession on the global bare metal cloud market
Available Customizations
With the given market data, MarketsandMarkets offers customizations as per the company’s specific needs. The following customization options are available for the report:
Product Analysis
- The product matrix provides a detailed comparison of the product portfolio of each company.
Geographic Analysis
- Further breakup of the Asia Pacific market into countries contributing 75% to the regional market size
- Further breakup of the North American market into countries contributing 75% to the regional market size
- Further breakup of the Latin American market into countries contributing 75% to the regional market size
- Further breakup of the Middle Eastern & African market into countries contributing 75% to the regional market size
- Further breakup of the European market into countries contributing 75% to the regional market size
Company Information
- Detailed analysis and profiling of additional market players (up to 5)
Generating Response ...
Growth opportunities and latent adjacency in Bare Metal Cloud Market