Global IaaS Market on Course for $512.4 Billion by 2031

Roshani

posted on 1 week ago — updated on 1 second ago

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The Infrastructure-as-a-Service Market is expected to reach $512.4 billion by 2031, at a CAGR of 23.1% from 2024 to 2031

Meticulous Research®, a global leader in market research, has recently released a comprehensive report titled "Infrastructure-as-a-Service Market by Offering (Compute, Storage, Others), Deployment (Public, Private, Hybrid), Organization Size, Application (Hosting, Others), Sector (IT & Telecommunications, BFSI, Others), and Geography - Global Forecast to 2031." This report provides an in-depth analysis of the infrastructure-as-a-service (IaaS) market, highlighting its potential growth and key trends over the next decade.

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According to the report, the IaaS market is expected to reach a staggering $512.4 billion by 2031, growing at an impressive compound annual growth rate (CAGR) of 23.1% from 2024 to 2031. This growth is largely driven by the increasing adoption of cloud infrastructure, particularly within the banking, financial services, and insurance (BFSI) sector. Additionally, more enterprises are shifting from traditional on-premise services to IaaS solutions, recognizing the benefits of scalability, flexibility, and cost-efficiency.

However, the report also identifies significant challenges that could hinder market growth. Chief among these are concerns over data privacy and security, which remain major deterrents for many organizations considering a move to cloud-based infrastructure. Despite these concerns, the market is expected to continue expanding, spurred by the growing adoption of cloud technologies among small and medium-sized enterprises (SMEs) and the rising demand for customized and managed cloud services.

A key area of concern for stakeholders is the shortage of skilled IT professionals, which could pose a significant barrier to market growth. The demand for cloud computing expertise is outpacing the supply, creating a talent gap that could slow the adoption of IaaS solutions.

The report segments the IaaS market by various factors, including offering, deployment mode, organization size, application, and sector. In terms of offering, the market is divided into compute, network, storage, and other services. The compute segment is expected to dominate, accounting for more than 42% of the market by 2024. This is due to the increasing use of virtualized computing resources by SMEs, which are driven by limited IT budgets and a strong push toward digital transformation.

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On the other hand, the storage segment is projected to experience the highest growth rate during the forecast period. The rising volume of data generated by large enterprises and the growing need for cost-effective storage solutions are key factors driving this segment's growth.

In terms of deployment mode, the market is categorized into public, private, and hybrid clouds. The public cloud segment is anticipated to lead the market, capturing more than 50% of the share by 2024. The widespread adoption of the public cloud by SMEs, owing to its cost-effectiveness and flexible pricing models, is a significant driver of this trend.

However, the hybrid cloud segment is expected to register the highest CAGR over the forecast period. Organizations are increasingly adopting hybrid cloud solutions to enhance performance and security, modernize their infrastructure, and optimize costs by leveraging both public and private cloud environments.

When analyzing the market by organization size, large enterprises are predicted to hold the largest share, accounting for over 55% of the market by 2024. The adoption of advanced technologies such as cloud computing, artificial intelligence (AI), and blockchain, coupled with the rapid migration of IT infrastructure to the cloud, are key factors contributing to this dominance.

Nevertheless, SMEs are expected to register the highest growth rate during the forecast period. The digital transformation sweeping across this sector, coupled with the increasing adoption of public cloud services, is driving the demand for IaaS solutions among smaller businesses. The cost-efficiency, security, and enhanced computing capabilities offered by IaaS are particularly appealing to SMEs.

In terms of application, the market is segmented into testing and development, hosting, storage, backup and recovery, high-performance computing, and other applications. The storage, backup, and recovery segment is expected to account for the largest market share, exceeding 38% by 2024. This dominance is attributed to the growing reliance on cloud storage solutions by large enterprises, driven by the increasing volume of data and the need for simplified storage management.

Moreover, this segment is also projected to experience the highest growth rate during the forecast period. The ongoing digital transformation and the migration of workloads to the cloud, along with the growing data volumes in large enterprises, are key factors driving this growth.

The market is also segmented by sector, with IT & telecommunications expected to hold the largest share of over 32% by 2024. The increasing adoption of advanced technologies such as cloud computing and the widespread use of IaaS to reduce data center costs and increase storage capacity are key drivers for this segment. Telecommunications companies, in particular, are migrating to cloud infrastructure to reduce operational costs and improve deployment times.

However, the retail & e-commerce sector is anticipated to register the highest CAGR during the forecast period. The growing need to automate workflows and online transactions, coupled with the demand for data integrity and the increasing use of cloud infrastructure to store data and analyze customer preferences, are driving the adoption of IaaS in this sector.

Geographically, North America is expected to dominate the IaaS market, accounting for over 46% of the global share by 2024. The region's growth is driven by government initiatives promoting cloud computing, the presence of major technology companies, and the widespread adoption of advanced technologies. Companies in North America are increasingly leveraging cloud infrastructure to improve business productivity and decision-making by migrating their on-premise workloads to the cloud.

However, the Asia-Pacific region is projected to witness the highest CAGR of over 24.5% during the forecast period. The growing adoption of IaaS by SMEs to reduce maintenance costs, coupled with the proliferation of cloud computing services in countries like China and Japan, are key factors driving this growth. Additionally, increasing investments by major players in strengthening cloud computing services and the adoption of managed cloud data center services in China, Japan, and India are expected to further fuel market expansion in the region.

Key Players

The key players operating in the infrastructure-as-a-service market are Amazon Web Services, Inc. (U.S.), Microsoft Corporation (U.S.), Alibaba Cloud (China), Google LLC (U.S.), Huawei Technologies Co., Ltd. (China), Oracle Corporation (U.S.), IBM Corporation (U.S.), Cisco Systems, Inc. (U.S.), SAP SE (Germany), VMware, Inc. (U.S.), Rackspace Technology, Inc. (U.S.), DigitalOcean LLC (U.S.), Hewlett Packard Enterprise Company (U.S.), Tencent Cloud (China), Linode LLC (U.S.), NTT Communications Corporation (Japan), Utho (India), and Vultr (U.S.).

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Key Questions Answered in the Report:

What are the high-growth market segments in terms of the offering, deployment mode, organization size, application, and sector?
What is the historical market size for the infrastructure-as-a-service market?
What are the market forecasts and estimates for 2024–2031?
What are the major drivers, restraints, opportunities, challenges, and trends in the infrastructure-as-a-service market?
Who are the major players in the infrastructure-as-a-service market, and what are their market shares?
What is the competitive landscape like?
What are the recent developments in the infrastructure-as-a-service market?
What are the different strategies adopted by major market players?
What are the trends and high-growth countries?
Who are the local emerging players in the infrastructure-as-a-service market, and how do they compete with other players?