INFRASTRUCTURE AS-A-SERVICE MARKET ANALYSIS

The global infrastructure-as-a-service market size was valued at US$ 52.5 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 22.7% from 2023 to 2030.  The rise in infrastructure-as-a-service solutions is due to a host of factors such as increasing demand for cloud computing, developing trend of digitization and increasing adoption of IaaS by various industries. Moreover, the demand for infrastructure-as-a-service is also increasing because of its ability to provide cost-effective IT infrastructure.

Global Infrastructure-As-A-Service Market: Regional Insights

North America to dominate the global infrastructure-as-a-service market over the forecast period. The region is home to some of the giants in the market due to which it becomes a lucrative hub for innovation. Moreover, major players the region are also focused on developing new solutions, geographical expansion, and strategic alliances. These factors along with increasing demand for low cost cloud infrastructure, and faster accessibility to network are driving growth of the market in North America region.

Furthermore, Europe is also projected to account for major share in the global infrastructure-as-a-service market over the forecast period. This is due to increasing demand for cloud services across several industry verticals, presence of advanced IT infrastructure along with rise in need for cost effective computing solutions in the region. Moreover, owing to its cost-effective solutions and high awareness about its advantages, the demand for IaaS is increasing in the region, which is likely to support growth of the market in the near future.

Figure 1: Global Infrastructure-As-A-Service Market Share (%), By Region, 2022

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Global Infrastructure-As-A-Service Market Drivers:

Rise in demand for faster data accessibility and low cost IT infrastructure to boost market growth

The focus of enterprises all over the world is growing on creating mobile workforces, where employees are able to access data from distant places through internet services. This in turn creates the need for virtual sets of IT components storage, servers, networks, and others. IaaS offers faster data access despite of data center location, owing to installation of common IT infrastructure. Thus, the adoption of IaaS is increasing all over the world due to the rise in need for faster data accessibility and low cost IT infrastructure. This in turn is expected to fuel growth of the global infrastructure-as-a-service market over the forecast period.

Growing adoption of cloud across various industry verticals to drive market growth

The adoption of cloud services has increased across several industry verticals such as retail, manufacturing, healthcare, BFSI, media & entertainment, telecom & IT, and several others. The adoption of IaaS is on wide scale in banking sector owing to advantages such as data protection, cost savings, and disaster recovery services. Thus, this factor is further expected to support growth of the global infrastructure-as-a-service market over the forecast period.

Global Infrastructure-As-A-Service Market Opportunities:

Increasing adoption of cloud among SMEs in developing countries is expected to offer growth opportunities in the global infrastructure-as-a-service market over the forecast period. The adoption of cloud infrastructure has increased across small and medium enterprises due to its various advantages such as enhanced reliability, uptime, increased flexibility of data access, and enriched IT service among others. Improved customer support, and replacement of conventional IT infrastructure, and enhanced business continuity is also creating growth opportunities in the market.

Growing need for reducing management cost of IT infrastructure to generate growth opportunities in the global infrastructure-as-a-service market over the forecast period. Technological innovations are leading to rising mobility, sophisticated working environment, ease of access, and digitalization development in various business verticals. Thus, the demand for reduced cost of IT infrastructure management is increasing, which is further creating growth opportunities in the global infrastructure-as-a-service market.

Global Infrastructure-As-A-Service Market Trends:

Cost optimization and distributed cloud computing driving adoption of cloud is a recent trend

The need for distributed cloud infrastructure applications and databases will increase in the future to cater the modern workflow and their needs. Distributed cloud computing is now regionally dispersed infrastructure that can run services mainly at the edge of the network and help companies reduce network congestion, latency, and risk of losing data. This trend is likely to continue in the global infrastructure-as-a-service market over the forecast period.

Telecom & IT segment is gaining traction in the market

The acceptance of cloud-based services is widespread in the industry, due to which, telecommunication and IT sector are likely to grow with rapid pace in the infrastructure-as-a-service market. This sector produces a large amount of financial, personal, and healthcare data. Many telecom companies are preparing to offer cloud IaaS, as it can manage several operational demands. Thus, this is in turn expected to support growth of the global infrastructure-as-a-service market over the forecast period.

Global Infrastructure-As-A-Service Market Restraints:

Concerns regarding security over deployment of private cloud to hamper market growth

Several industries including retail, BFSI, public sector, and healthcare having large customer bases are at risk of retaining critical business data of stakeholders due to client information and data privacy. Deploying private cloud infrastructure can be a risk to data privacy.  The cases of security breaches and high profile hacking have increased in recent years all over the world, and private cloud networks are vulnerable to such incidents. This factor in turn is expected to hamper growth of the global infrastructure-as-a-service market over the forecast period.

Lack of IT infrastructure in underdeveloped regions to hinder the market pace

Several underdeveloped regions lack IT infrastructure, which is one of the major factor that hampers growth of the market. As per the World Economic Forum, many countries in Latin America, Asia Pacific, and the Middle East & Africa are not yet technologically advanced and lack rich IT infrastructure along with digital content. This in turn impacts adoption of IaaS in these region. Thus, this factor is expected to hamper growth of the global infrastructure-as-a-service market over the forecast period.

Figure 2: Global Infrastructure-As-A-Service Market Share (%), By Deployment Type, 2022

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Global Infrastructure-As-A-Service Market Segmentation:

The global infrastructure-as-a-service market report is segmented into Component, Deployment Type, User Type, and Industry Vertical.

Based on Component, the market is segmented into Storage, Network, Compute, and Others. Out of which, Storage is expected to dominate the global market over the forecast period and this is attributed to the high level of cost saving on overall cost of ownership, and rise in demand for data backup and protection across end users such as SMEs and large enterprises. The capability of infrastructure-as-a-service of handling unexpected demand and increase storage organizations are inclined toward management and planning of backup as well as recovery systems through IaaS. The segment is likely to gain major growth in the coming future.

Network segment is also expected to witness significant growth in the near future and this is owing to the market players offering extended cloud network solutions for facilitating availability and flexibility of secure networking in the virtual infrastructure. Moreover, various strategic developments including business expansion and product innovation in the cloud networking market are expected to drive growth of this segment in the global infrastructure-as-a-service market over the forecast period.

Based on Deployment Type, the market is segmented into Private, Public, and Hybrid. Out of which, Private is expected to dominate the global market over the forecast period and this is attributed to the increasing adoption of private cloud models providing additional customization, procurement, and security features for an existing infrastructure of a company. Private IaaS is used to for dedicated enterprises having limited access to data and is controlled by respective users. It is widely used for safeguarding and optimal security of confidential information.

Public segment is also expected to witness significant growth in the near future and this is owing to the growing inclination toward public cloud services. IaaS providers are focused on improving their self-serving capabilities and offerings including expansion of resources. Public cloud model operate through remote cloud servers where users experience all computing access through subscription-based utility billing method. The demand for this segment is increasing rapidly, which is likely to support growth of this segment in the coming future.

Based on User Type, the market is segmented into Large Enterprises, and Small and Medium Enterprises. Out of which, SMEs is expected to dominate the global market over the forecast period and this is attributed to the rising demand for unlimited storage, protected networks, security, and low-cost IT expenditure among SMEs. Many SMEs from developing countries are increasingly adopting cloud infrastructure. For instance, in March 2017, MasterCArd and Mastriano announced partnership to introduce first ever SME cloud platform in Asia Pacific with integrated business applications that will cut down operational cost for these enterprises.  

Large Enterprises segment is also expected to witness significant growth in the near future and this is owing to the shift to IT spending cloud-based application services. The demand for hybrid solutions is thus increasing, due to which large enterprises are able to adopt IaaS for the pay-as-you-go model. Moreover, major awareness regarding benefits of adopting IaaS in large enterprises is also driving growth of this segment.

Based on Industry Vertical, the market is segmented into BFSI, Government & Education, Healthcare, Telecom & IT, Retail, Manufacturing, Media & Entertainment, and Others. Out of which, Healthcare is expected to dominate the global market over the forecast period and this is attributed to the growing adoption cloud infrastructure in the sector. The adoption of IaaS in healthcare can help cut down costs, and offer access to the latest hardware without requiring installation, purchase, or maintenance of the tools in the facilities. Moreover, it also provides evidence-based care and highly precise and rapid diagnosis for treatments. Thus, this sector is likely to gain substantial growth in the market.

Telecom & IT segment is also expected to witness significant growth in the near future and this is owing to the widespread adoption of cloud infrastructure. It enables telecoms to go online, and allows companies to stay connected to the whole world without requiring high cost technologies. With growing acceptance of cloud-based services, the segment is gaining traction in the global infrastructure-as-a-service market.

Global Infrastructure-As-A-Service Market: Key Developments

In February 2020, NTT DATA Services, a leading global technology service provider entered into collaboration with Amazon Web Services, Inc. for delivering novel products, solutions and services designed for accelerating transformations.

In February 2020, Google Cloud announced the acquisition of Cornerstone Technology, a provider of high quality technology solutions for IT. With this acquisition, mainframe workloads of customers will be migrated to Google Cloud.

In March 2020, Hewlett Packard Enterprise (HPE) announced availability of JPE Container Platform, which is the enterprise-grade container platform created for supporting both non cloud-native and cloud-native applications that use open source Kubernetes.

In December 2022, Amazon Web Services, Inc., collaborated with Slalom, LLC for providing business with Amazon slalom launch centers, which offer modernization IT services as well as rapid business changes.

Global Infrastructure-As-A-Service Market: Key Companies Insights

The global infrastructure-as-a-service market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global infrastructure-as-a-service market are Alibaba Group Holding Limited, Redcentric Plc., Amazon Web Services, Inc., Rackspace Hosting, Inc., Dell EMC, Oracle Corporation, Google LLC, Microsoft Corporation, Hewlett Packard Enterprise Development LP, and International Business Machines Corporation

*Definition: IaaS is the foundation layer of a cloud service stack, which also includes Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). While PaaS and SaaS provide business value at the application layer, IaaS delivers the core IT resources needed to support them.