Public Cloud Services Market to Grow by USD 1.7 Trillion (2025-2029), Increasing Number of Data Center Hyperscale and Colocation Providers Boost the Market, with AI Impacting Trends - Technavio

NEW YORK, Jan. 31, 2025 /PRNewswire/ -- Report on how AI is redefining market landscape - The global public cloud services market size is estimated to grow by USD 1.7 trillion from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of  23.1%  during the forecast period. Increasing number of data center hyperscale and colocation providers is driving market growth, with a trend towards strategic partnerships and collaborations among market participants. However, vendor lock-in and operational complexities  poses a challenge. Key market players include Adobe Inc., Alibaba Group Holding Ltd., Alphabet Inc., Amazon.com Inc., AT and T Inc., Cisco Systems Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., International Business Machines Corp., Microsoft Corp., Oracle Corp., Rackspace Technology Inc., Salesforce Inc., SAP SE, ServiceNow Inc., Tencent Holdings Ltd., Verizon Communications Inc., VMware Inc., and Workday Inc..

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Public Cloud Services Market Scope
Report Coverage	Details
Base year	2024
Historic period	2019 - 2023
Forecast period	2025-2029
Growth momentum & CAGR	Accelerate at a CAGR of 23.1%
Market growth 2025-2029	USD 1707.7 billion
Market structure	Fragmented
YoY growth 2022-2023 (%)	22.3
Regional analysis	North America, Europe, APAC, South America, and Middle East and Africa
Performing market contribution	North America at 59%
Key countries	US, Canada, Germany, China, UK, France, India, Italy, Japan, and Brazil
Key companies profiled	Adobe Inc., Alibaba Group Holding Ltd., Alphabet Inc., Amazon.com Inc., AT and T Inc., Cisco Systems Inc., Dell Technologies Inc., Fujitsu Ltd., Hewlett Packard Enterprise Co., International Business Machines Corp., Microsoft Corp., Oracle Corp., Rackspace Technology Inc., Salesforce Inc., SAP SE, ServiceNow Inc., Tencent Holdings Ltd., Verizon Communications Inc., VMware Inc., and Workday Inc.

Market Driver

Public cloud services have become a game-changer in the business world, allowing enterprises to access high-level computing resources over the public internet. This IT model offers utility-based sharing, enabling agile deployment and cost savings. Big data, ML, and AI are key trends driving cloud adoption, providing valuable insights for businesses. Consumer experiences are at the forefront, with SaaS leading the way for applications like Video-on-Demand (VoD) and Software as a Service (SaaS) in various sectors, including healthcare, where patient data security is paramount. Hybrid cloud solutions offer a balance between public and private cloud, ensuring data security for business-sensitive information. The workplace shift towards work-from-home models and the rise of smart technologies have accelerated digital transformation. Emerging technologies like IoT, automation, and next-generation technologies are revolutionizing industries, from healthcare to transportation, creating new opportunities. Cloud infrastructure services, including data management and security solutions, are essential for businesses navigating this digital landscape. As technology consumerization continues, enterprises must prioritize data security, ensuring firewalls and intranets protect their valuable information. Small and medium-sized businesses can also benefit from cloud services, leveling the playing field in the Fourth Industrial Revolution. 

The public cloud services market is highly competitive, with existing vendors seeking strategic partnerships and collaborations to gain an edge. These alliances with infrastructure, software, technology, and platform providers facilitate product development, geographic expansion, and access to technological expertise. Vendors can explore new opportunities in various sectors such as IT and telecom, BFSI, retail, healthcare, manufacturing, media and entertainment, and government organizations. Notable vendors like SAP and Salesforce are leveraging these collaborations to expand their customer base and generate revenue through software sales. 

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 Market Challenges

• Public cloud services have revolutionized the IT industry, enabling enterprises to access high-level computing resources over the public internet. However, this model comes with challenges. Managing big data and implementing ML and AI require advanced capabilities. Agile deployment and security are critical concerns, especially for business-sensitive data. Utility-based sharing models offer cost savings but raise concerns around data management and security. Emerging technologies like IoT and digitalization are driving the need for cloud services in various sectors, including healthcare. SaaS and VoD are popular applications. However, hybrid cloud solutions are increasingly preferred for their flexibility. The work-from-home model and smart technologies have accelerated digital transformation. Cloud infrastructure services are essential for next-generation technologies like AI and ML. Data security is paramount, with firewalls and security solutions essential for protecting business-sensitive information. Small and medium-sized businesses are adopting cloud services for cost savings and agility. The fourth industrial revolution brings new opportunities and challenges, requiring a shift from traditional data centers to cloud infrastructure. The consumerization of technology and the rise of connected devices demand and secure cloud services.
• Public cloud services offer numerous benefits to businesses, including flexibility, scalability, and cost savings. However, there is a potential downside to consider: vendor lock-in. This term refers to the difficulty in transitioning from one cloud vendor to another once data or applications have been stored on a specific platform. Applications built using proprietary tools and services can make it particularly challenging to switch providers. This dependence on a single vendor can limit a business's ability to explore other technology solutions and potentially result in higher costs in the long run. It is essential for businesses to carefully evaluate their cloud strategy and consider the potential for vendor lock-in before making a commitment to a specific cloud provider.

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Segment Overview 

This public cloud services market report extensively covers market segmentation by  

Service 

• 1.1 SaaS
• 1.2 IaaS
• 1.3 PaaS

Type 

• 2.1 SMEs
• 2.2 Large enterprise

Geography 

• 3.1 North America
• 3.2 Europe
• 3.3 APAC
• 3.4 South America
• 3.5 Middle East and Africa

End User

1.1 SaaS-  SaaS, or Software as a Service, is a cloud computing model that enables users to access software applications and associated data through a web browser, eliminating the need for hardware purchases and management. The popularity of SaaS due to the increasing use of mobile devices and the rise of instant messaging and social media in businesses. SaaS offers several advantages, including easy access to enterprise applications, a pay-as-you-go model, and the ability to access software from anywhere. Microsoft Office 365 and Slack are examples of public SaaS solutions that offer various applications such as ERP, CRM, and HRM. Public SaaS vendors also provide IaaS and PaaS services to ensure the smooth running of SaaS applications. The use of public SaaS is on the rise due to its elasticity, scalability, and simplified access to advanced technologies like AI, big data, and IoT. These factors are driving the growth of the global public cloud services market, particularly the SaaS segment, during the forecast period.

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Research Analysis

The Public Cloud Services market is experiencing exponential growth, driven by the increasing adoption of cloud computing and next-generation technologies. Cloud services, including Big Data and Machine Learning, are transforming businesses by enabling Agile deployment, Utility-based sharing models, and High-level computing. Security is a top priority, with advanced Security solutions such as Firewalls and AI-powered threat detection systems ensuring Data security for Business-sensitive data. Cloud Infrastructure services are essential for Digital transformation, powering industries like Healthcare, Automation, IoT, and Connected devices. AI and ML are revolutionizing Consumer experiences, from personalized recommendations to predictive maintenance. Cloud services are also integral to the rollout of Next-generation technologies like Big Data analytics and Smart electric vehicles. The Internet is the backbone of this digital revolution, with Cloud services providing the infrastructure for Data management and Next-generation applications.

Market Research Overview

The Public Cloud Services Market refers to the delivery of IT resources and services over the Public Internet, enabling enterprises to access and utilize technology on a utility-basis. This model is revolutionizing the way businesses operate, with the adoption of Big Data, ML (Machine Learning), AI, and Cloud Services becoming increasingly popular. Agile deployment and security are key considerations, with advanced security solutions such as firewalls and encryption ensuring data management and protection of business-sensitive data. The market is witnessing significant growth due to the emergence of emerging technologies like IoT, AI, and ML, which require high-level computing power and data storage. The Fourth Industrial Revolution, characterized by technology consumerization and the work-from-home model, is driving the demand for cloud infrastructure services. Sectors like healthcare, with the use of telemedicine, Patients' VoD, and digitalization, are also benefiting from this shift. Small and medium-sized businesses are also embracing cloud services for their cost-effectiveness and flexibility, leading to a growing market for Software-as-a-Service (SaaS) offerings. The workplace shifts towards smart technologies and automation are further fueling the demand for cloud services, with the Internet of Things (IoT) and Big Data Analytics playing a crucial role in this transformation. Cloud services are enabling digital transformation across industries, from connected devices and smart electric vehicles to the healthcare sectors, and are a critical component of the next-generation technologies shaping our world.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Service
• SaaS
• IaaS
• PaaS
• Type
• SMEs
• Large Enterprise
• Geography
• North America
• Europe
• APAC
• South America
• Middle East And Africa
• End User

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
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Email: media@technavio.com
Website: www.technavio.com/

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SOURCE Technavio