Cloud computing is expected to witness significant growth in the enterprise segment, with the total revenue opportunity projected to reach $1.4 trillion globally by 2027, according to a forecast by GlobalData, a prominent data and analytics company. This surge is being driven by positive sentiments surrounding IT investments among enterprises worldwide, as well as their adoption of large-scale automation and IT modernization initiatives.
The COVID-19 pandemic played a crucial role in accelerating these transformations within enterprises, such as the widespread adoption of remote work, automation of essential business processes, and the use of digital channels for customer interactions. Such developments have bolstered investments in cloud computing over the past two years. Moreover, the optimism regarding enterprise IT spending in the post-pandemic era is expected to further fuel the growth of the cloud computing market in the coming years.
GlobalData’s recent ICT Decision Makers Survey provides valuable insights into the enterprise cloud computing market. The survey revealed that a majority (81 percent) of respondents reported an increase in their overall enterprise ICT budgets for the year 2023 compared to the previous year. Furthermore, around 76 percent of respondents reported an increase in their enterprise cloud computing budget for 2023 over the previous year, indicating a favorable growth outlook for the cloud computing market.
As enterprises expedite their IT modernization efforts, cloud computing is poised to benefit significantly. Cloud adoption empowers organizations with greater scalability, agility, resilience, and the ability to leverage DevOps practices for infrastructure and software development.
The forecast period is also expected to witness increased traction in the enterprise cloud computing market due to the growing use of the Internet of Things (IoT) in tandem with the proliferation of 5G networks. Cloud computing offers a platform for storing, processing, and managing IoT data, along with enabling remote access, monitoring, and management of IoT devices, connected factories, and data.
Another driving force for enterprise cloud investments is the increasing use of artificial intelligence (AI) to analyze vast volumes of data and generate meaningful insights. Cloud infrastructure provides scalable storage and computing capabilities required to process large amounts of data and run AI algorithms.
The public cloud services category, including Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), is expected to account for over 60 percent of the total addressable market during the forecast period, with SaaS being the largest category overall. However, PaaS is projected to be the fastest-growing cloud service segment due to the preference for cloud-native application development platforms, their cost advantage, and improved application development, deployment, and management capabilities. Additionally, application modernization projects driven by technologies like Kubernetes will further boost the growth of the PaaS market.
In terms of enterprise size, large enterprises with 1,001 or more employees are projected to dominate the total revenue opportunity for cloud computing globally. Nonetheless, the micro, small, and medium-sized enterprises (MSME) segment with 1-1000 employees is expected to witness faster growth, with a Compound Annual Growth Rate (CAGR) of 18.1 percent over the forecast period.
The findings of the Decision Makers Survey 2023, conducted by GlobalData in H1 2023 and encompassing responses from 2,428 participants worldwide, provide a comprehensive understanding of the current trends and sentiments driving cloud computing investments in the enterprise market.
