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Infrastructure-as-a-Service (IaaS) Market size was over USD 96.17 billion in 2023 and is poised to cross USD 1.88 trillion by 2036, growing at more than 25.7% CAGR during the forecast period i.e., between 2024-2036. In the year 2024, the industry size of infrastructure as a service is estimated at USD 115.94 billion. The growth of the market can be attributed to increasing digitalization and technological advancements, high demand for managed cloud computing services, and adoption of IaaS solutions led by increasing need for organisations to reduce the IT burden and lower the incurred cost. Furthermore, government initiatives to encourage the adoption of the internet and other advanced technologies in their economies are supporting the growth in this infrastructure-as-a-service market.
Infrastructure-as-a-service (IaaS) is a cloud computing form with which organisations can outsource their data center capabilities to an external cloud service provider. It frees up human resources and allows consumer to adjust processing capacity by scaling the infrastructure resources in an automated manner. Along with platform-as-a-service (PaaS) and software-as-a-service (SaaS), IaaS forms one of the core service models of cloud computing and is the second largest segment of the global public cloud market.
Moreover, benefits such as cost-effectiveness owing to optimum utilization of computing resources, efficient management and data control, and escalating demand of disaster recovery, storage, and virtualization are also responsible for the upsurge adoption of IaaS solutions.
However, concerns over data protection, privacy and security are restraining the adoption of IaaS solutions, hindering the growth of the infrastructure-as-a-service (IaaS) market. In addition to that, lack of proper infrastructure and awareness about the capabilities of cloud infrastructure are further challenging the growth of the market.
Growth Drivers
Increasing digitalization and technological advancements
High demand for managed cloud computing services
Increasing adoption of IaaS solutions to lower the IT burden and incurred cost
Challenges
Concerns over data protection, privacy and security
Lack of proper infrastructure and awareness about the capabilities of cloud infrastructure
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Base Year |
2023 |
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Forecast Year |
2024–2036 |
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CAGR |
25.7% |
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Base Year Market Size (2023) |
USD 1.88 trillion |
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Forecast Year Market Size (2036) |
USD 96.17 billion |
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Regional Scope |
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The infrastructure-as-a-service (IaaS) market is segmented by deployment type into public cloud IaaS, private cloud IaaS, and hybrid cloud IaaS, out of which, the hybrid cloud IaaS segment is anticipated to hold the largest market share over the forecast period. Hybrid cloud provide integrated service by using both public and private cloud to avoid assigning all of consumer data to one system in a single server, reducing risks related to data theft and data loss. Approximately over 80% of enterprises were estimated to have a hybrid cloud strategy in 2021.
Public cloud IaaS segment is estimated to witness the highest growth during the forecast period owing to increasing adoption among SMEs on the back of its beneficial features such as cost-effectiveness, and pay-as-you-go model which requires no upfront investment. Global public cloud IaaS spending, in 2021, was estimated to be over USD 90 Billion.
Based on component, the infrastructure-as-a-service (IaaS) market is segmented into disaster recovery as a service (DRaaS), storage as a service (STaaS), network as a service (NaaS), high performance computing as a service (HPCaaS), and others, out of which, the disaster recovery as a service (DRaaS) segment is projected to hold the largest share of the global market owing to increasing utilisation of DRaaS by organisations in order to protect their data and restore it efficiently to avoid data management disasters including human-made errors and cases of data theft.
On the basis of enterprise size, the infrastructure-as-a-service market is segmented into small & medium-sized enterprises and large enterprises, out of which, small & medium sized enterprises segment is anticipated to witness the highest growth over the forecast period owing to increasing adoption of IaaS solutions on the back of low investments and IT expenditure.
The global infrastructure-as-a-service (IaaS) market is further segmented on the basis on end-user into BFSI, IT & telecommunications, government, media & entertainment, manufacturing, healthcare, education, and others, out of which, BFSI segment is expected to hold the largest market share over the forecast period owing to increasing adoption of IaaS solutions on the back of benefits such as cost savings, data protection, and disaster recovery services in order to maintain business continuity with large volumes of confidential business and financial data.
Our in-depth analysis of the global market includes the following segments:
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By Deployment Type |
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By Component |
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By Enterprise Size |
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By End-User |
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Geographically, the global infrastructure-as-a-service (IaaS) market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region. North America region is expected to hold largest industry share by 2036, owing to presence of advanced IT infrastructure and high penetration of hybrid cloud in the region. For instance, the cloud infrastructure services spending in the United States in 2021 was approximately USD 19 Billion, an increase of nearly 30% from that of 2020.
Asia-Pacific region is projected to register highest growth over the forecast period owing to rapid adoption of cloud infrastructure to ensure low-cost networking, and storage solutions. Furthermore, increasing investments in IT infrastructure in countries such as China, India, and Australia are providing potential growth opportunities for the infrastructure-as-a-service market..
July 2020: VMware, Inc. acquired Datrium, Inc. to bolster its DRaaS portfolio. Datrium DRaaS solution was designed to deliver an end-to-end cloud driven user experience which helped VMware expand on the existing performance-optimized VMware Site Recovery DRaaS solution with a cost-optimized strategy.
Author Credits: Abhishek Verma
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