IaaS market to grow steadily by 2031

The infrastructure-as-a-service (IaaS) market to expand at a CAGR of 28.5% during the forecast period from 2021 to 2031, according to Transparency Market Research. Rising practice of enterprises to rent or lease cloud servers for computing and data storage fuels the growth of the IaaS market.

IaaS is a cloud computing service that enables users to run any operating system or applications on rented servers without incurring their maintenance and operating costs. Infrastructure-as-a-service also offers the advantage of providing access to servers to customers that are geographically closer to their end users. IaaS automatically scales both up and down depending on the demand, and provides guaranteed service level agreement in times of uptime and performance.

Key findings

Increasing adoption of hybrid cloud systems from an array of industries such as healthcare, e-commerce, and manufacturing due to limitations of data security of public and private cloud models creates ample opportunities in IaaS market.

Vast rise in the number of data centers to support the exploding volume of business data of IT and telecom companies boosts the IaaS market. Establishment of small and medium size data centers strengthens the growth of IaaS market.

Growing digitalization of economies where governments support information and communication systems leading to the increasing utilization of cloud systems stimulates the demand for infrastructure-as-a-service. This attracts small-sized and medium-sized enterprises for the adoption of infrastructure services.

Immense benefit of expansion of network services from the underlying digital transformation bodes well for the demand of infrastructure services. Large corporations in the IaaS market are leveraging the potential of digital transformation to expand their service networks, thus amplifying their infrastructure services. For instance, in September 2021, Google Inc. expanded network services across four new places namely Germany, Chile, Saudi Arabia, and Israel, wherein six new subsea cables were announced to expand its infrastructure-as-a-service offerings.

In another instance, in June 2021, NTT Communication Corporation – the ICT solutions and international communications business of the NTT Group expanded its Flexible Interconnect service to overseas markets to create opportunities in its infrastructure services. Flexible Interconnect delivers private and secure connections to various cloud service providers as well as interconnection between global data centers of the NTT Group.

Monumental growth of the e-commerce industry that involves vast amount of transactional data is leading enterprises to adopt infrastructure services. Infrastructure-as-a-service is cost-efficient and can be scaled up depending on the need of e-commerce service providers. This substantiates the dominance of retail & e-commerce segment in the infrastructure-as-a-service market in 2020.

Asia Pacific is emerging as a key region in the IaaS market. Exponential growth of the e-commerce industry, along with rising data traffic in healthcare, telecom, and manufacturing industries is creating lucrative opportunities in the IaaS market in the region.

IaaS market: Growth drivers

  • Rapid adoption of hybrid cloud systems by organizations due to limitations of data security of private and public cloud models boosts the infrastructure-as-a-service market
  • Extensive support from governments in several countries for digitalization that increases the utilization of cloud systems propels the infrastructure-as-a-service market

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