Public Cloud - Japan

Japan

Revenue in the Public Cloud market is projected to reach €19.77bn in 2024.
Software as a Service dominates the market with a projected market volume of €8.00bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 18.01%, resulting in a market volume of €45.25bn by 2029.
In global comparison, most revenue will be generated in the United States (€360.20bn in 2024).

Key regions: United States, Germany, China, Japan, United Kingdom

Definition:

A public cloud is defined as the digital infrastructure and computing resources that are managed by a service provider. Examples of public cloud computing resources include virtual machines, storage, and services, all of which are available for purchase with flexible (e.g., pay as you go and subscription) business models. Such payment options make it possible for customers to access, scale, and utilize resources as needed. Public cloud solutions make it possible for users to save on IT costs, increase their efficiency, and take advantage of advanced technologies without having to invest in long-term IT solutions. Public cloud service providers own and maintain the physical infrastructure, hardware, and software. Users only need to pay for the computing resources that they require. The Public Cloud market refers to the companies that provide these cloud computing resources and services to individuals, businesses, and organizations.

Structure:

The Public Cloud market is structured into five markets based on the type of service models provided by the companies.

The Infrastructure as a Service (IaaS) market covers the resources and services related to the data center infrastructure.
The Platform as a Service (PaaS) market covers the resources and services related to the virtual environments used for software development.
The Software as a Service market (SaaS) market covers the resources and services related to software applications that can be accessed via a web browser.
The Business Process as a Service (BPaaS) market covers the resources and services related to the various business processes such as finance and accounting, human resources, customer service, and supply chain management, all delivered through the cloud.
The Desktop as a Service (DaaS) market covers the resources and services related to virtual desktop environments, which are accessible from any device with an internet connection.

Additional Information:

The public cloud market comprises revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players of the public cloud market include companies such as Amazon (Amazon web services), Microsoft (Azure), Google (Cloud), and IBM (Cloud).

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Analyst Opinion

The Public Cloud market in Japan has experienced moderate growth due to factors such as increasing adoption of digital technologies, rising awareness of cloud services, and the convenience of online access. This growth can be attributed to the sub-markets of Infrastructure, Platform, Software, Business Process, Desktop, and Disaster Recovery as a Service. However, the mild growth rate may be impacted by challenges such as data privacy concerns and competition from local providers.

Customer preferences: Japanese consumers are increasingly turning to public cloud services for their business and personal needs, driven by the convenience and cost-effectiveness of cloud computing. This trend is further amplified by the cultural emphasis on efficiency and innovation, as well as the growing demand for remote work solutions in the wake of the COVID-19 pandemic. As a result, the public cloud market in Japan is expected to experience significant growth in the coming years, with a strong focus on security and data privacy to address cultural concerns about protecting sensitive information.

Trends in the market: In Japan, the Public Cloud Market is experiencing a surge in demand for hybrid cloud solutions, with businesses looking to combine the scalability of public cloud with the security of private cloud. This trend is driven by the increasing adoption of remote work and the need for flexible IT solutions. Additionally, there is a growing trend towards multi-cloud strategies, as businesses seek to leverage the strengths of different cloud providers. These trends signify a shift towards a more diverse and agile cloud landscape, with potential implications for industry stakeholders such as increased competition and the need for cross-platform compatibility.

Local special circumstances: In Japan, the Public Cloud market is heavily influenced by the country's unique cultural and regulatory landscape. With a strong emphasis on privacy and data protection, Japanese companies have been cautious in adopting cloud technology. However, the government's push towards digitization and the increasing demand for remote work solutions have led to a growing interest in public cloud services. Additionally, the country's geographical location, prone to natural disasters, has also highlighted the importance of disaster recovery and business continuity, making public cloud solutions an attractive option for businesses. Moreover, Japan's aging population has created a demand for cloud-based healthcare services, driving the growth of the public cloud market in this sector.

Underlying macroeconomic factors: The expansion of the Public Cloud Market in Japan is impacted by various macroeconomic factors, such as the country's growing economy, government initiatives to promote digital transformation, and increasing adoption of cloud technologies in various industries. Japan's stable economic growth and supportive regulatory policies have created a conducive environment for the growth of the public cloud market. Moreover, the rising demand for cost-effective and scalable computing solutions, along with the increasing use of big data analytics, artificial intelligence, and Internet of Things (IoT) applications, are driving the growth of the public cloud market in Japan. Additionally, the ongoing COVID-19 pandemic has accelerated the adoption of cloud computing as organizations seek to enhance their digital capabilities and remote working capabilities.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises. Figures are based on the money spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of telecommunications infrastructure. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.