CLOUD NATIVE SOFTWARE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

Market Challenges And Opportunities

Cloud Native Software Market Opportunities:

• Adoption in Small and Medium Businesses: Increasing adoption of cloud-native software among SMBs provides significant opportunities for market growth. Containerized micro services help SMBs accelerate application delivery with limited resources. Cloud-native technologies enable easier deployment, scaling, and management without large IT teams. Vendors are offering solutions tailored for SMBs. As per estimates, over 65% of SMBs will adopt cloud-native technologies by 2025. The growing SMB demand creates new expansion opportunities.
• Applicability across Diverse Verticals: The cloud native software market has growth opportunities across verticals like healthcare, retail, manufacturing, government, etc. For instance, in healthcare, cloud native technologies can enable compliant handling of sensitive patient data while providing the flexibility to scale up telehealth platforms rapidly. In manufacturing, it allows connecting legacy industrial machinery to cloud-based analytics and AI to enable smart factories. Vendors can expand their capabilities to target more verticals. According to reports, cross-industry adoption of cloud-native software will grow at over 15% CAGR through 2030.
• Partnerships and Acquisitions: Strategic partnerships and acquisitions between technology vendors, cloud providers, system integrators, and service providers to enhance their cloud-native capabilities are creating new prospects. For instance, recent partnerships between AWS-Salesforce (AWS uses Salesforce to develop a specific “cloud journey” plan for a customer, and then aligns its sales and operations teams with the information, tools) and Google Cloud-Wipro (Wipro is proud to be a Global System Integrator partner for Google Cloud, delivering unparalleled cloud services, AI, machine learning and security) aim to develop cloud-native solutions tailored for industries. Acquisitions like IBM-Red Hat and VMware-Pivotal Software consolidate cloud-native software stacks. Such deals can potentially accelerate cloud-native adoption across enterprises. In 2021, Anthropic has enhanced its AI safety infrastructure by integrating Scalyr's potent logging and monitoring features, which are tailored for cloud-based applications. Anthropic to provide more comprehensive tools to help businesses ensure their AI systems behave securely and reliably regardless of where they are deployed. Similarly, in 2022, VMware partnered with Anthropic to further strengthen the security and trustworthiness of AI models running on VMware platforms.
• Incorporation of Emerging Technologies: Incorporation of cutting-edge technologies like Artificial intelligence (AI) / Machine learning (ML), Internet Of Things (IoT), and block chain with cloud-native software provides new business opportunities. Cloud-native approach allows easy integration and delivery of these technologies to end users. For instance, combining AI/ML tools with cloud-native stacks enables faster model development and deployment. Block chain-based cloud-native apps allow new decentralized models. 5G enables rapid data transfer for cloud-native mobile apps. Adoption of such emerging technologies using cloud native software provides new opportunities for vendors. As per data from the U.S. Department of Energy's Lawrence Berkeley National Laboratory, the worldwide installed stock of IoT devices is estimated to grow from 14.20 billion devices in 2020 to 30.90 billion devices in 2025.

• Data security and privacy concerns
• Complexity of micro services management
• Challenges in legacy modernization

Cloud Native Software Market Restraints:

• Data Security and Privacy Concerns: Data security and privacy concerns pose challenges for cloud-native software adoption. Though microservices offer isolation, data exposure risks persist, especially in public cloud deployments. Containers share the host kernel, increasing attack surfaces. While encryption helps protect data in transit and at-rest, vulnerabilities can allow data breaches. Ensuring compliance with regulatory requirements for data in cloud-native settings can be demanding. For highly sensitive applications, organizations prefer private clouds or on-premise hosting. Addressing security and privacy concerns is an important problem to solve. Storing and processing sensitive data in the cloud requires robust encryption and security protocols to prevent data breaches or unintended data exposure.
• Complexity of Micro services Management: Though micro services architecture enables flexibility, the complexity of managing a high volume of services creates adoption barriers. As the quantity of microservices escalates, the complexity of monitoring their interconnections, deployments, and managing version control increases exponentially. Performance monitoring and troubleshooting also become difficult. It requires high organizational DevOps maturity. There is also the overhead of operating multiple database instances. Lack of internal expertise in containers and orchestration is hampering adoption among enterprises. Easing these management burdens will be key. Micro services require robust networking capabilities for service-to-service communication, which can become complex as the number of services increases.
• Challenges in Legacy Modernization: Difficulties in transitioning traditional monolithic programs to cloud-native architectures act as a barrier to their broader acceptance. Re-architecting huge legacy codebases into independent micro services requires considerable time and cost. Testing and ensuring continued functioning post-migration is also difficult. For some complex legacy systems, the ROI of migration may be unclear or negative. Maintaining legacy systems and cloud-native stacks in parallel also increases overhead. Developing easy migration pathways through incremental modernization is vital for large enterprises. Organizations in regulated industries may have more stringent constraints on how data is stored, processed, and transmitted, which can complicate the move to cloud native solutions.