Public Cloud Market

Updated on : April 13, 2023

Public Cloud Market Size, Growth Analysis

The public cloud market size is anticipated to reach USD 987.7 billion by 2027 from an estimated USD 444.7 billion in 2021, growing at a CAGR of 17.3% over the course of the forecast period. Public cloud is an IT model where cloud service providers offer resources such as compute and storage, applications, and develop-and-deploy environments among others are provided on-demand to organizations and individuals over the public internet. Companies who are planning to adopt public cloud services should carefully weigh their provider options, especially if they are bound by a long-term contract. With careful preparation, monthly cloud service prices can be reduced, but enterprises with unpredictable public cloud usage may struggle to avoid blowing their budgets on public cloud services when consumption rises.

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Public Cloud Market Dynamics

Public Cloud Market Drivers:  Big Data, AI, and ML integration with cloud

The increasing uptake of big data, Al, ML, and other technologies are predicted to fuel market expansion. These technologies are transforming the public cloud market  because they enable users to monitor, analyze, and visualize raw data. Businesses may improve the accessibility and usability of complex data while also improving their visualization skills by integrating these developing technologies with cloud-based solutions. Due to the growing use of Al and ML technologies, businesses today use more data and experience fewer storage issues. Additionally, these technologies assist firms in increasing productivity, improving decision-making, and reducing operational costs. Businesses use solutions powered by Al to enhance their operational, strategic, and insight-driven capabilities. Al is capable of automating challenging and time-consuming processes to increase productivity and carry out data analysis without the need for manual input. With the combination of big data, Al, and ML, organizations that offer cloud solutions and services are always focusing on R&D projects, product upgrades, and new product launches. IT professionals can also monitor and manage critical workflows using Al. Secondary data indicates that Microsoft has introduced Azure Health Data Services. It is a platform as a service (PaaS) designed to handle transactional and analytical workloads. It aggregates health information, runs Al on the cloud, and only accepts Protected Health Information (PHI). Therefore, it is anticipated that big data, AI, and ML will increasingly be adopted, leading to public cloud market expansion.

Restraint: Businesses in developing regions limit level of technical expertise

Implementing cutting-edge technology to completely automate and streamline their business processes is helping organizations speed up the process of becoming digitally oriented. Due to the public cloud's benefits, particularly its lower costs and enhanced business agility, it is now an essential part of enterprise IT strategies. In order to properly integrate and run cloud services in enterprises, it is now even more important to have technical experts on staff as well as effective change management. An organization's ability to transition is significantly hampered by employee resistance to adapt to changes and broaden its skill sets. Additionally, businesses now emphasize increasing profits more than more of emphasis on increasing profits than on developing employee skills through appropriate training. Moreover, in order to avoid upfront expenditures, firms are reluctant to accept the maturation process and are content to continue with traditional infrastructures or software services. These problems lead to a skills scarcity and may result in business saturation due to competitors' potential huge investments in updating their business operations and service offerings. These factors would allow rivals the chance to expand their client and public cloud market share, which can cost firms that don't adopt new developments both customers and money.

Public Cloud Market Opportunity: Improved effectiveness for hosting applications in public cloud

Public cloud providers can offer their services at a lower price than the majority of companies can do on their relative to economies of scale. This improved efficiency leads to cost reductions for businesses that move to the public cloud. The public cloud also enables a higher application density, which lowers expenses for businesses even further. Hosting applications in the public cloud can improve the efficiency of users' enterprises. Businesses that move their applications and data to the public cloud can take advantage of the provider's economies of scale. Additionally, businesses may use fewer servers and run more applications, which boosts productivity and reduces expenses. Organizations may frequently launch new applications or services in the public cloud much more quickly than they could if they were to develop them internally. This is because the public cloud already has the necessary infrastructure in place, allowing businesses to start using it immediately. All they need to do is provide the materials.

Public Cloud Market Challenge: Higher costs associated with cloud data storage

Even while the cloud is less expensive in terms of setup costs, maintenance costs, and support costs, the overall cost of ownership depends on the amount of data that needs to be saved. Storing large data sets in cloud databases or data lakes can be expensive. More bandwidth is required for cloud services than for on-premises solutions because data transfer is crucial to their operation. Cloud services are usually more expensive than options offered on-premises due to the higher cost associated with this increased bandwidth need. Additionally, the majority of cloud providers charge a data egress fee if customers decide to move their data out of the cloud. These fees remain the same whether the data is moved to a different cloud or returned to its original place. AWS charges USD 0.01 per GB for transfers to public IP addresses, while data delivery to Amazon's cloud is free. To prevent businesses from erasing their data from the cloud where it now resides, organizations must pay data egress costs, which are often highly expensive.

US to account for largest market size during forecast period

The geographic analysis of the North America IT services market is segmented into country, including US and Canada. In the public cloud market, the US is projected to hold the biggest public cloud market share in 2022, and the pattern is anticipated to last through 2027. Additionally, the US is home to well-established end-user sectors and suppliers that are constantly adjusting to modern technology for increased business productivity and labor efficiency. Several small and large public cloud solution providers, including AWS, Microsoft, Google, VMware, Salesforce, Oracle, and IBM, are based in the US and are among the major forces behind the expansion of the public cloud market in the nation. According to secondary data, 94% of US company IT decision-makers employ at least one kind of public cloud deployment. Further, Cloud storage is the main IT/operational priority for 64% of US infrastructure for the upcoming year. Businesses in the US rely on managed service providers and global service integrators to help them with their cloud migration projects. 44% of global public cloud provider revenue and 51% of the world's hyperscale data centre capacity are based in the US.

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France to account for highest CAGR during the forecast period

France's economy is stable, and more people are supporting attempts to undergo digital transformation. Due to the public cloud's low TCO advantages, firms in France are quickly embracing it. The region's end users are technically skilled but they are cutting back on IT spending to enhance their Rol. The French government has cautiously deployed cloud technology choices for data storage and service delivery. The public sector is investing more money in the public cloud as it is focused on giving its operations cloud technology solutions that are comparable to those utilized by the private sector. Although there are several data centers all across the country that offer cloud services to customers, they are not yet being utilized to their fullest extent. The leading cloud service providers are expanding their businesses in France. According to secondary data, a cloud-first approach for governmental organizations is emphasized in the French government's economic recovery plan. Despite ongoing concerns about data security and national sovereignty, a lot of enterprises in the country are now utilizing the public cloud.

Public Cloud Market Players

Some of the major public cloud market vendors are AWS (US), Microsoft (US), Google (US), Salesforce (US), Alibaba Cloud (China), Oracle (US), IBM (US), SAP (Germany), Tencent (China), Workday (US), Fujitsu (Japan), VMWare (US), Rackspace (US), HPE (US), Adobe (US), NEC (Japan), Cisco (US), Dell Technologies (US), ServiceNow (US), OVH (France), Huawei (China), Verizon (US), OrangeGroup (France), NetApp (US), dinCloud (US), Vultr (US), Megaport (Australia), AppScale (US), Zymr (US), Genesis Cloud (Germany), Ekco (Ireland), Tudip Technologies (India), ORock Technologies (US), and CloudFlex (Nigeria).

Public Cloud Market Report Scope

This research report categorizes the public cloud market based on service types, organization sizes, deployment modes, business functions, verticals, and regions.

Based on the Service Model:

• Infrastructure as a Service
• Platform as a Service
• Software as a Service

Based on the Organization Sizes:

• Large enterprises
• Small and Medium Enterprises (SMEs)

Based on the Verticals:

• BFSI
• Telecommunication
• IT & ITeS
• Government & Public Sector
• Retail & Consumer Goods
• Manufacturing
• Energy & Utility
• Media & Entertainment
• Healthcare & Life Sciences
• Other Verticals

Based on the Region:

• North America
  • United States
  • Canada
• Europe
  • United Kingdom
  • Germany
  • France
  • Italy
  • Spain
  • Netherlands
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Singapore
  • Australia
  • South Korea
  • Rest of Asia Pacific
• Middle East & Africa
  • Kingdom of Saudi Arabia
  • United Arab Emirates
  • South Africa
  • Qatar
  • Rest of Middle East & Africa
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments:

• In October 2022, UBS and Microsoft announced landmark expansion of their partnership to accelerate UBS’s public cloud footprint over the next five years. Through this transformational initiative, UBS plans to have more than 50% of its applications, including critical workloads, running on Microsoft Azure, now UBS’s primary cloud platform. The partnership furthers UBS’s “cloud-first” strategy and the modernization of its global technology estate.
• In September 2022, to support the whole Salesforce Customer 360 platform, Salesforce announced Salesforce Genie, a hyperscale real-time data engine. Every business can use Genie to transform data into customer magic and offer seamless, highly customized experiences in sales, service, marketing, and commerce that dynamically adjust to changing customer information and wants in real time.
• In September 2022, IBM announced four additional varieties of IBM Cloud VPC with the latest release, which will all support vGPUs. With the help of vGPUs, users can process their data quickly, even when using workloads that require a lot of arithmetic, such as 3D applications, ML, or high-performance computing. GPUs, however, were traditionally restricted to bare metal for traditional clusters.
• In September 2022, Workday introduced a new industry initiative to accelerate customer cloud transformations through a wide-ranging partner ecosystem. Industry Accelerators also emphasize Workday's compatibility with other essential software providers and programs in ecosystems important to each industry, such as electronic health records, regulatory reporting, and tax compliance solutions.
• In July 2021, AWS announced the general availability of Amazon EBS io2 Block Express volumes, with Amazon EC2 R5b instances powered by the AWS Nitro System to provide the best NAS performance available on EC2. The io2 Block Express volumes also would support io2 features such as Multi-Attach and Elastic Volumes.

Frequently Asked Questions (FAQ):

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