Cloud computing market is anticipated to grow at a significant CAGR of 15.6% during the forecast period (2024-2031). The growing demand for cloud computing from the retail and consumer goods, healthcare, and life sciences sectors is driving the global cloud computing market. Additionally, increased use of edge computing, 5G, artificial intelligence (AI), machine learning (ML), big data, and computing has increased its demand. According to the European Union (EU), in December 2023, 42.5% of EU enterprises bought cloud-computing services in 2023, mostly for e-mail, storage of files, and office software.

Market Dynamics

Growing Multi and Hybrid Cloud Deployment

Hybrid and multi-cloud solutions are growing increasingly common. Many businesses, such as banks and insurance providers, store their data in hybrid clouds, which combine the advantages of private and public clouds. To maintain control over their data and resources and to take advantage of each cloud service provider's advantages, enterprises are now distributing their workload among several of them. Utilizing several clouds reduces possible risks and sites of failure while offering cost-effectiveness. Instead of putting every single application on that cloud, one can select a specific service from a specific cloud service provider in multi-cloud computing that satisfies needs. 

Increasing Demand for Edge Computing

Data processing, analytics, and storage that is done closer to the source geographically are all included in edge computing. It indicates that data processing and storing are done closer to the original sensors and equipment. Numerous advantages are offered by it, including decreased latency, improved efficiency, higher security, privacy, and a fast data transmission rate. It processes data that is not limited by time and operates in real time. Fast processing and low latency can be easily achieved as 5G usage grows. Edge computing is growing as a result of the merger of numerous telecom and IT companies. As the number of IoT devices rises, real-time data and data analysis are greatly aided by edge computing.  

Market Segmentation

• Based on the deployment model, the market is segmented into private cloud, public cloud, and hybrid cloud.

• Based on the components, the market is segmented into hardware, software, and services.

• Based on the vertical, the market is segmented into BFSI, government, military & defense, telecom & IT, healthcare, retail, and others (energy and utilities, media and entertainment).

Hybrid Cloud is Projected to Hold the Largest Segment

The primary factors supporting the hybrid cloud growth include companies can benefit from increased flexibility, scalability, and resource efficiency by utilizing the hybrid cloud model, which combines the advantages of private and public clouds. Companies can shift workloads and apps between private and public clouds in a hybrid cloud, depending on their needs. Managing changing expectations and cutting expenses both benefit from this flexibility. The market players offering hybrid cloud solutions are engineered to boost AI performance and build cloud agility by delivering more computing and faster memory to their market-leading portfolio. For instance, in December 2023, Lenovo introduced new hybrid cloud platforms and services to accelerate AI. The new AI-ready platform delivers improved performance and the latest accelerators as a critical next step to deliver a dynamic hybrid AI approach across public, private, and foundational models to enable AI for All.

BFSI Segment to Hold a Considerable Market Share

The factors supporting segment growth include cloud computing eliminating the need for costly on-premise infrastructure and IT personnel, and cloud-computing delivering significant cost reductions. In addition, financial institutions are using the cloud's scalability to address spikes in data processing and transaction volume. Furthermore, cloud-based analytics provide important insights from enormous collections of client data, enabling BFSI companies to improve customer experiences and customize products. For instance, in April 2024, Oracle Corp. introduced a new Oracle AI-powered cloud service that helps banks mitigate anti-money-laundering risks. The AI-powered cloud service enables banks to run inexpensive, hypothetical scenario testing to adjust thresholds and controls to sort through transactions, identify nefarious activity, and meet compliance requirements more effectively.

Regional Outlook

Global cloud computing market is further segmented based on geography including North America (the US, and Canada), Europe (the UK, Italy, Spain, Germany, France, and the Rest of Europe), Asia-Pacific (India, China, Japan, South Korea, and Rest of Asia-Pacific), and the Rest of the World (the Middle East & Africa, and Latin America). 

Growing Demand for Cloud Computing in Asia-Pacific

• The regional growth is attributed to the rapid digitalization of regional industries, from manufacturing and critical infrastructure to healthcare and finance, increasing internet usage, and government programs that support digitization. Cloud technologies' flexibility and affordability appeal especially to India's expanding startup scene driving the growth of the region. According to the India Brand Equity Foundation, in January 2024, cloud technology account for 8.0% of India’s GDP by 2026. It has the potential to boost the country's GDP by $310-380 billion by 2026, while also producing 14 million employment. A concentrated all-around effort can result in a continuous 25-30.0% increase in cloud investment over the next five years (2022 onwards) to reach $18.5 billion, assisting India in realizing the full potential of the cloud market.

Global Cloud Computing Market Growth by Region 2024-2031

North America Holds Major Market Share

North America holds a significant share owing to the presence of cloud computing providers such as Amazon Web Services Inc., Google LLC, IBM Corp., and Microsoft Corp. in the region. The strong government measures supporting digital transformation, along with the broad use of cloud technologies across numerous industries are driving regional growth. The market players in the region investing in advanced cloud services and AI applications to grow modernize and improve their products and enterprises. For instance, in May 2024, Microsoft Corp. announced a broad investment package designed to strengthen the role of Southeast Wisconsin as a hub for AI-powered economic activity, innovation, and job creation. These investments include $3.3 billion in cloud computing and AI infrastructure, the creation of the country’s first manufacturing-focused AI co-innovation lab, and an AI skilling initiative to equip more than 100,000 of the state’s residents with essential AI skills.

Market Players Outlook

*Note: Major Players Sorted in No Particular Order.

The major companies serving the cloud computing market include Amazon Web Services Inc., Google LLC, IBM Corp., Microsoft Corp., and SAP SE among others. The market players are increasingly focusing on business expansion and product development by applying strategies such as collaborations, mergers and acquisitions to stay competitive in the market. 

Recent Developments

• In April 2024, IBM Corp. acquired HashiCorp, Inc. creating a comprehensive end-to-end hybrid cloud platform. The $6.4 billion acquisition adds a suite of leading hybrid and multi-cloud lifecycle management products to help clients grappling with AI-driven application growth and complexity.

• In February 2023, Akamai Technologies, the cloud company that powers and protects life online, plans to embed cloud-computing capabilities into its massive edge network. Akamai’s Generalized Edge Compute (Gecko) advances Akamai’s strategy to be the cloud computing platform for companies that want to deliver better experiences by running workloads closer to users, devices, and sources of data.

The Report Covers

• Market value data analysis of 2023 and forecast to 2031.
• Annualized market revenues ($ million) for each market segment.
• Country-wise analysis of major geographical regions.
• Key companies operating in the cloud computing market. Based on the availability of data, information related to the product, and relevant news is also available in the report.
• Analysis of business strategies by identifying the key market segments positioned for strong growth in the future.
• Analysis of market-entry and market expansion strategies.
• Competitive strategies by identifying ‘who-stands-where’ in the market.