Cloud Services Market is Estimated to Witness High Growth Owing to Opportunity of Reduced IT Infrastructure Costs

Cloud Services Market

Cloud services offerings include a range of services such as Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS). IaaS provides virtual server and storage capacities, allowing customers to host their own operating systems. PaaS provides additional software building and development tools that developers can use to create web applications without the costs of buying and managing their own underlying servers and storage. SaaS provides complete applications delivered over the internet on a pay-per-use basis. Cloud services are easy to deploy and manage as they do not require users to install or maintain hardware infrastructure.

The global cloud services market size is estimated to be valued at US$ 621.97 Mn in 2023 and is expected to exhibit a CAGR of 5.3% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market Opportunity:

Reduced IT infrastructure costs coupled with demand for scalable infrastructure are expected to drive the growth of the cloud services market during the forecast period. Cloud services offer on-demand access to computing resources including servers, storage, databases, networking, and software services without any upfront infrastructure investment and fixed costs. This allows organizations to optimize IT infrastructure spending by eliminating the need for upfront capital expenditure on hardware, utility charges, and maintenance spending. Organizations can use cloud services to scale up or scale down infrastructure resources on the basis of increasing or decreasing workload demands without any time delays. This helps reduce over-provisioning and offers flexibility and scalability to businesses at a lower total cost of ownership as compared to traditional on-premise IT infrastructure. Thus, the opportunity to significantly reduce IT infrastructure costs is expected to propel the growth of the cloud services market during the forecast period.

Porter’s Analysis

Threat of new entrants: Low as the market is dominated by few well established players. New entrants require huge investments and technology expertise to compete with existing players.

Bargaining power of buyers: Moderate as there are multiple players providing similar cloud services but buyers can negotiate on price and features. Switching cost for buyers is low.

Bargaining power of suppliers: Low as there are many technology and infrastructure providers. Suppliers do not have pricing power over companies providing cloud services.

Threat of new substitutes: Moderate as new technologies like edge computing can replace cloud services for certain applications but complete substitution is difficult as of now.

Competitive rivalry: High as players compete intensely on pricing, features and customer experience to gain market share. Frequent innovations help players sustain competition.

SWOT Analysis

Strength: Cloud services offer agility, scalability and reduce IT costs for organizations. They enable access to advanced technologies.

Weakness: Dependence on stable internet connectivity. Security and privacy concerns over sensitive enterprise data on the cloud.

Opportunity: Increasing demand from SMBs for cloud-based applications and services. Growing adoption of technologies like AI, IoT, and blockchain which rely on cloud infrastructure.

Threats: Strict data privacy laws in regions. Dependency on hyper-scale cloud providers for infrastructure.

Key Takeaways

The Global Cloud Services Market Size is expected to witness high growth driven by increasing digitization across industries. The global cloud services market size is estimated to be valued at US$ 621.97 Mn in 2023 and is expected to exhibit a CAGR of 5.3% over the forecast period 2024 to 2031.
The Asia Pacific cloud services market is growing at the fastest pace on back of rising technology adoption among SMBs in the region coupled with big infrastructure investments by China, India and other Asian countries. Regional players are emerging strongly along with global cloud majors. The North American cloud services market currently accounts for the largest share owing to heavy investments in research and a steady stream of innovations. Europe is another major region for cloud services providers looking to tap into opportunities across industries.

Key players operating in the cloud services market are The Toro Company, Kubota Corporation, Honda Motor Co., Husqvarna AB, Briggs & Stratton, Deere & Company, MTD Products, AriensCo, Stihl, Emak S.p.A., AL-KO, Makita Corporation, Robert Bosch, Stanley Black & Decker, Techtronic Industries, Yamabiko Corporation, American Honda Motor Co., Generac Power Systems, Lawn-Boy Inc., AL-KO Gardentech. These companies focus on expanding their cloud offerings and strengthening partnerships.

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