Infrastructure as a service (IaaS) Market By Solution (Managed hosting, Disaster Recovery as a Service, Storage as a Service, Colocation, Network management, Content delivery, High Performance Computing as a Service), By Component Type (Storage, Network, Compute, Others), By Deployment (Private, Public, Hybrid), By Enterprise Size (Large Enterprises, SMEs), By Industry (BFSI, Government and Education, Healthcare, Telecom and IT, Retail, Manufacturing, Media and Entertainment, Others) and By Region (North America, Latin America, Asia Pacific, Europe, and Middle East & Africa), and COVID-19 Analysis – Global Forecast 2023 to 2032

Market Analysis and Insights:

The market for Infrastructure as a Service (IaaS) was estimated to be worth USD 130.12 billion in 2023, and from 2024 to 2032, it is anticipated to grow at a CAGR of 21.45%, with an expected value of USD 738.17 billion in 2032.

The market for Infrastructure as a Service (IaaS) is propelled by various factors. One key driver is the increasing need for on-demand and adaptable computing resources, coupled with the requirement for economical IT infrastructure solutions, which is spurring the uptake of IaaS. Organizations are transitioning from conventional on-premises infrastructure to cloud-based models to attain scalability and minimize infrastructure expenses. A second significant factor driving this market is the rising trend of digital transformation across various industries. As businesses aim to capitalize on emerging technologies like Artificial Intelligence (AI), Internet of Things (IoT), and big data analytics, they necessitate sturdy and scalable infrastructure to support these initiatives. Moreover, the global shift towards remote work and the necessity for remote access to data and applications have led to a surge in the demand for IaaS, empowering organizations to ensure uninterrupted business operations and facilitate smooth remote collaboration. Furthermore, IaaS provides advanced security features, robust disaster recovery capabilities, and simplified management, thereby fostering its adoption among enterprises. Nonetheless, apprehensions concerning data security, regulatory compliance, and dependency on service providers may impede market expansion. In essence, the growth of the IaaS market is primarily propelled by the requirement for scalable, adaptable, cost-efficient, and secure infrastructure solutions to bolster digital transformation, remote work setups, and business continuity strategies.

Infrastructure as a service (IaaS) Market Scope:

Market Definition

Infrastructure as a Service (IaaS) represents a cloud computing approach that offers virtualized computing elements through the web. This includes servers, storage, as well as networking features, allowing users to adjust their infrastructure based on demand without requiring investments in physical hardware or maintenance expenses.

Infrastructure as a Service (IaaS) is an essential component for modern enterprises, providing a dynamic and expandable infrastructure that allows companies to concentrate on their core strengths, lower expenses, and enhance operational efficiency. Through IaaS, businesses can efficiently control and access their computing resources, such as servers, storage, and networking, in a virtualized environment maintained by a service provider. This strategy removes the necessity for organizations to invest in and maintain physical infrastructure, leading to decreased capital expenditures and operating costs. Additionally, IaaS allows for the flexible adjustment of resources to meet business requirements, ensuring optimal performance and cost efficiency. Employing IaaS empowers businesses to improve flexibility, drive innovation, and swiftly respond to evolving market conditions, securing a competitive advantage in today's digital environment.

Key Market Segmentation:

Insights On Key Solution

Managed hosting

Managed hosting is expected to dominate the Global Infrastructure as a Service (IaaS) market. It offers businesses a comprehensive solution by providing infrastructure management and support services. With managed hosting, organizations can offload their IT infrastructure responsibilities to a third-party service provider, allowing them to focus on core business activities. This part provides benefits like improved scalability, enhanced security, and reduced operational costs. Its high demand in sectors such as IT & telecom, healthcare, and e-commerce is driving its dominance in the IaaS market.

Disaster Recovery as a Service

Disaster Recovery as a Service (DRaaS) is a crucial part within the IaaS market but is not expected to dominate. DRaaS enables businesses to recover and restore their critical data and applications in case of any disruptive event. Although it provides a vital solution for ensuring business continuity, its adoption is more specific to organizations that prioritize data recovery and risk management. Hence, while DRaaS is a significant part of the IaaS market, it is expected to have a relatively smaller share compared to other parts.

Storage as a Service

Storage as a Service (STaaS) is another essential part within the IaaS market. It provides businesses with on-demand storage capacity, eliminating the need for physical infrastructure and enabling flexible data storage options. STaaS offers cost-effective solutions, scalability, and data redundancy, making it highly attractive for organizations across various industries. However, while STaaS plays a crucial role in the IaaS landscape, its dominance is expected to be overshadowed by the managed hosting part due to the broader range of services it encompasses.

Colocation

Colocation services within the IaaS market involve housing IT infrastructure in a shared data center facility. While colocation offers benefits like reduced capital expenditure, scalable growth, and improved connectivity, it is not projected to dominate the IaaS market. Colocation is more relevant for organizations that want to maintain control over their infrastructure while leveraging the advantages of a shared facility. Its popularity may vary across industries, but overall, its market share is expected to be smaller compared to managed hosting.

Network management

Network management services in the IaaS market focus on ensuring reliable and efficient network connectivity for businesses. While crucial for a stable and secure infrastructure, network management is not anticipated to dominate the market. Its importance lies in complementing other parts by providing robust and high-performing networking solutions. However, due to its narrower scope and supporting role, network management is likely to have a smaller share compared to managed hosting in the IaaS market.

Content delivery

Content delivery services in the IaaS market aim to optimize the delivery and distribution of digital content to end-users. Although vital for efficient content delivery, this part is not expected to dominate the IaaS market. Content delivery's significance mainly lies within industries that heavily rely on fast and reliable content distribution, such as media and entertainment or e-commerce. However, due to its specific application and limited scope, content delivery would likely have a smaller market share compared to managed hosting.

High Performance Computing as a Service

High Performance Computing as a Service (HPCaaS) offers businesses access to high-performance computing resources on a pay-per-use basis. While HPCaaS plays a significant role in enabling complex computational tasks and data-intensive research, it is not projected to dominate the IaaS market. HPCaaS is highly specialized and caters to organizations with specific requirements for advanced computing capabilities. Therefore, its market share is expected to be relatively smaller compared to the dominant part of managed hosting in the IaaS market.

Insights On Key Component Type

Network

The network component type is expected to dominate the Global Infrastructure as a Service (IaaS) market. With the increasing demand for scalable and flexible IT solutions, businesses are relying on cloud-based platforms and services, which heavily rely on a robust and efficient network infrastructure. The network component is essential for connecting various resources, ensuring seamless communication, and enabling data transfer between different parts of the infrastructure. As companies expand their operations and require efficient data processing and storage capabilities, the network part plays a crucial role in supporting the overall IaaS infrastructure.

Storage

The storage component type is another important component in the IaaS market. As data volumes continue to grow exponentially, businesses need reliable and scalable storage solutions to store, access, and manage their digital assets. The storage part encompasses various technologies such as data centers, storage devices, and software-defined storage solutions. With the increasing adoption of big data analytics, artificial intelligence, and IoT applications, the demand for storage capacity is expected to significantly rise. However, while storage is a critical aspect of the IaaS market, it is likely to be overshadowed by the dominant network part.

Compute

The compute part, which includes servers, processing units, and virtualization technologies, plays a vital role in enabling IaaS solutions. Compute resources are essential for running applications, processing data, and performing complex computations in the cloud environment. With the increasing need for computing power, especially for resource-intensive workloads, the demand for computer resources in the IaaS market is substantial. However, the compute part is expected to have a lesser dominating presence compared to the network part, as the focus of IaaS solutions is shifting towards distributed data processing and storage capabilities.

Others

The Others component type typically includes additional components such as security solutions, database management systems, and automation tools, which are integral to the overall IaaS infrastructure but do not have a dominant presence individually. These components support and enhance the functionality of the network, storage, and compute parts. While they contribute to the comprehensive IaaS ecosystem, their individual impact on the market may be relatively smaller, leading to the network part being the dominant force in the Global IaaS market.

Insights On Key Deployment

Private 

Private cloud deployment is expected to dominate the global Infrastructure as a Service (IaaS) market. Private cloud deployment offers enhanced security and privacy, making it suitable for organizations that handle sensitive data or have strict compliance requirements. With private cloud deployment, companies have greater control over their infrastructure, allowing them to customize and optimize their resources according to their specific needs. Moreover, private clouds provide a dedicated environment, ensuring better performance and reliability. These advantages make private cloud deployment the preferred choice for organizations looking to leverage IaaS solutions while maintaining control over their infrastructure and data.

Public

Public cloud deployment is a significant part of the global IaaS market, although it is not expected to dominate. Public cloud deployment offers scalability, cost-effectiveness, and flexibility by providing on-demand resources and eliminating the need for infrastructure maintenance. This model is particularly attractive for small to medium-sized businesses and startups with limited IT resources as it shifts the responsibility of infrastructure management to the cloud service provider. While public cloud offers numerous benefits, organizations with strict compliance requirements and concerns about data security may prefer alternative deployment models such as private or hybrid cloud.

Hybrid

Hybrid cloud deployment is another notable part within the IaaS market. It combines the benefits of both private and public cloud deployments, offering greater flexibility and allowing organizations to tailor their infrastructure according to their specific requirements. Hybrid clouds enable companies to leverage the scalability and cost-effectiveness of public clouds while keeping sensitive data and critical applications within a secure private cloud. This deployment model is advantageous for organizations with variable workloads or data that requires stringent security measures. Although hybrid cloud deployment is expected to gain traction, it may not dominate the IaaS market as private cloud deployment caters to organizations with a greater need for control and security.

Insights On Key Enterprise Size

Large Enterprises

Large enterprises are expected to dominate the Global IaaS market. These companies typically have extensive IT infrastructure and are more likely to adopt complex cloud services like IaaS. They have greater financial resources, allowing them to invest in robust infrastructure and scale operations effectively. Furthermore, large enterprises often require high-performance computing and have specific security and compliance requirements, which can be efficiently fulfilled by IaaS providers. As a result, the demand for IaaS solutions is projected to be higher among large enterprises, making them the dominant part in the Global IaaS market.

SMEs

While large enterprises are expected to dominate the Global IaaS market, SMEs also play a significant role in driving its growth. Small and medium-sized enterprises have become increasingly aware of the benefits of cloud computing, including the flexibility, scalability, and cost-effectiveness offered by IaaS. As their businesses grow, SMEs are realizing the need for scalable IT infrastructure and are turning to IaaS providers to meet their computing needs. The adoption of IaaS allows SMEs to reduce capital expenditures on in-house infrastructure and focus on their core competencies. Although SMEs may not have the same level of demand as large enterprises, their growing adoption of IaaS makes them a vital part in the Global IaaS market.

Insights On Key Industry

Telecom and IT

The Telecom and IT part is expected to dominate the Global Infrastructure as a Service (IaaS) Market. This is primarily due to the increasing adoption of cloud computing, digital transformation initiatives, and the need for scalable and flexible IT infrastructure solutions in the Telecom and IT industry. Telecom and IT companies require reliable and secure infrastructure to support their networks, data storage, and applications. With the growing demand for cloud-based services and the need to manage massive amounts of data, Telecom and IT organizations are increasingly turning to IaaS solutions to enhance their operational efficiency, reduce costs, and drive innovation.

BFSI (Banking, Financial Services, and Insurance) 

The BFSI part is a significant player in the Global IaaS Market. The banking, financial services, and insurance industry heavily rely on technological solutions to process transactions, manage customer information, and mitigate risks. As this industry deals with sensitive data and stringent regulatory requirements, the need for robust and secure infrastructure becomes paramount. IaaS offers BFSI organizations the ability to scale their infrastructure on-demand, improve data accessibility, enhance security measures, and streamline operations. With the constant evolution of digital banking and financial technologies, BFSI is expected to continue dominating the IaaS market.

Healthcare 

The Healthcare industryis another critical player within the Global IaaS Market. The healthcare industry is experiencing a paradigm shift towards digitization, resulting in a massive surge of data generated from electronic medical records, medical images, and patient information. To manage this influx of data, healthcare organizations are increasingly adopting IaaS solutions to store, process, and analyze data efficiently. IaaS offers healthcare providers the flexibility to scale their infrastructure to accommodate changing needs, enhance data security and privacy, improve collaboration among healthcare professionals, and provide cost-effective solutions to enhance patient care and outcomes.

Retail 

The Retail industry is also a significant player in the Global IaaS Market. Retailers are increasingly adopting digital technologies to stay competitive in an evolving market. IaaS provides retail businesses with the necessary infrastructure to support e-commerce platforms, inventory management systems, customer relationship management tools, and data analytics. By leveraging IaaS solutions, retailers can scale their infrastructure during peak periods, ensure high availability of online platforms, optimize supply chain processes, and personalize customer experiences. The retail industry's growing reliance on digital transformation initiatives and the need for a flexible and scalable infrastructure contribute to its prominence in the IaaS market.

Government and Education 

The Government and Education part also holds a significant share in the Global IaaS Market. Government entities and educational institutions often deal with large volumes of data, require data storage and processing capabilities, and need secure and reliable infrastructure solutions. By adopting IaaS, government agencies can enhance their efficiency, reduce costs, and improve citizen services. Similarly, educational institutions can leverage IaaS to support online learning platforms, student information systems, and research data management. With the increasing focus on digital transformation and the need for advanced IT infrastructure in these sectors, Government and Education are expected to play a prominent role in the IaaS market.

Manufacturing 

The Manufacturing industry, although not dominating the Global IaaS Market, still contributes significantly to its growth. As the manufacturing industry undergoes digital transformation and Industry 4.0 initiatives, there is an increasing need for cloud-based infrastructure solutions to support connected devices, data analytics, and smart manufacturing processes. IaaS enables manufacturers to reduce IT costs, optimize production operations, enhance supply chain visibility, and improve overall business agility. The manufacturing sector's adoption of IaaS solutions may lag behind other parts due to unique IT requirements and existing legacy systems, but it is anticipated to grow in importance as manufacturers increasingly recognize the benefits of cloud-based infrastructure.

Media and Entertainment 

The Media and Entertainment industrymay not dominate the Global IaaS Market, but it still holds its relevance. Media and entertainment companies generate vast amounts of content that require secure and scalable infrastructure for storage, processing, and distribution. By embracing IaaS solutions, media organizations can streamline content delivery, improve collaboration among distributed teams, and optimize resource allocation. As the media landscape continues to evolve with the rise of streaming services, digital content consumption, and the need for real-time analytics, the demand for IaaS solutions within the media and entertainment industry is expected to grow.

Others 

Other industry covers various industries not explicitly mentioned in the given parts. While it is challenging to pinpoint a specific dominating part within this category, it includes diverse sectors such as energy, transportation, construction, and services. These industries may adopt IaaS solutions to address specific infrastructure needs, such as managing IoT devices, optimizing supply chains, or leveraging data analytics. While not individually dominating the Global IaaS Market, the collective contribution of these industry parts makes them a noteworthy part of the overall market landscape.

Insights on Regional Analysis:

North America

North America is expected to dominate the Global Infrastructure as a Service (IaaS) market. This region has a well-established and mature cloud infrastructure market, making it an ideal environment for the adoption of IaaS solutions. North America also houses several prominent cloud service providers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform, which play a crucial role in driving the growth of the IaaS market. Additionally, North America has a high level of technological advancement and a strong demand for scalable and cost-effective cloud solutions, further fueling the dominance of the region in the IaaS market.

Latin America

In Latin America, the demand for IaaS solutions is growing steadily. The region has witnessed increased adoption of cloud computing in recent years, driven by factors such as digital transformation initiatives and the need for agile and scalable IT infrastructure. However, despite the growth potential, Latin America still faces challenges in terms of infrastructure development and connectivity. These factors may limit the speed at which the IaaS market can expand in the region, preventing it from overtaking North America as the dominant market.

Asia Pacific

Asia Pacific is a rapidly growing market for IaaS, driven by the increasing digitization and IT modernization efforts in countries like China and India. The region boasts a large and diverse customer base, with a mix of established enterprises and emerging startups. Furthermore, government initiatives promoting cloud adoption, favorable regulations, and the presence of major cloud providers contribute to the growth of the IaaS market in Asia Pacific. However, despite its growth potential, Asia Pacific still lags behind North America in terms of overall market size and maturity, making it unlikely to surpass North America as the dominant region in the IaaS market.

Europe

Europe is witnessing a steady growth in the adoption of IaaS solutions. The region's large-scale enterprises and governments are driving the demand for cloud infrastructure services to enhance scalability and reduce IT costs. Additionally, Europe has stringent data protection regulations, such as the General Data Protection Regulation (GDPR), which encourage businesses to seek secure and compliant cloud solutions. However, despite its potential, Europe's IaaS market still faces challenges, including the fragmented nature of the market and varying levels of infrastructure development across countries. These factors may hinder Europe from emerging as the dominating region in the global IaaS market.

Middle East & Africa

The Middle East & Africa is experiencing a growing demand for cloud services, including IaaS. The region has witnessed a significant rise in digital transformation initiatives across various industries, which is driving the adoption of cloud infrastructure solutions. Additionally, governments in the Middle East are actively investing in developing smart cities and digital economies, further fueling the demand for IaaS. However, the Middle East & Africa still faces challenges such as limited internet penetration and inadequate technological infrastructure, which may slow down the growth of the IaaS market in the region. Therefore, it is unlikely that the Middle East & Africa will dominate the global IaaS market compared to North America.

Company Profiles:

Big tech companies are investing heavily on the IaaS solutions. Their have been significant growth noticed in the IaaS markety due to presence of big players.

Prominent entities within the Infrastructure as a Service (IaaS) sector are Amazon Web Services (AWS), Microsoft Corporation, Google LLC, International Business Machines Corporation (IBM), Oracle Corporation, Alibaba Group Holding Limited, Fujitsu Limited, Cisco Systems, Inc., Hewlett Packard Enterprise Development LP, and VMware, Inc. These industry leaders specialize in providing cloud computing services tailored to the needs of organizations across a multitude of sectors and sizes. Amazon Web Services, Microsoft, and Google are renowned for their extensive range of solutions and worldwide presence. IBM, Oracle, and Alibaba are also notable contenders in the market, offering scalable and dependable IaaS options. Moreover, Fujitsu, Cisco, Hewlett Packard Enterprise, and VMware are esteemed for their cutting-edge technology solutions and robust infrastructure offerings within the IaaS landscape.

COVID-19 Impact and Market Status:

The outbreak of the Covid-19 pandemic has expedited the expansion of the Global Infrastructure as a Service (IaaS) sector, with companies increasingly turning to cloud-based technologies to support remote operations and drive digital transformation efforts.

The outbreak of COVID-19 has had a profound impact on the Infrastructure as a Service (IaaS) sector. As remote work has become the standard practice, businesses have turned to cloud infrastructure to sustain their activities. This has resulted in a sharp rise in demand for IaaS offerings, enabling companies to swiftly and effectively expand their computing capacities. Additionally, the necessity for data storage and analysis has surged as organizations gather and scrutinize extensive data sets associated with the pandemic.

Nevertheless, the IaaS industry has encountered challenges due to the crisis, such as disruptions in supply chains and constraints on the development of physical infrastructure, which have impeded the growth of IaaS providers.

Furthermore, the economic instability wrought by the pandemic has compelled some enterprises to rethink their financial priorities, potentially decelerating the integration of IaaS solutions. Nonetheless, the IaaS market is projected to rebound and flourish in the post-pandemic landscape, as enterprises increasingly adopt cloud technologies for their adaptability, versatility, and cost efficiency.

Latest Trends and Innovation:

- In May 2020, Amazon Web Services (AWS) announced the acquisition of CloudEndure, a company specializing in disaster recovery and live migration solutions for the cloud.

- In August 2020, Google Cloud launched Confidential Computing, a new data security feature that allows customers to keep their data encrypted while in use.

- In September 2020, Microsoft announced the general availability of Azure Orbital, a new service offering satellite connectivity to Azure customers.

- In October 2020, IBM acquired Instana, an application performance monitoring company, to enhance its hybrid cloud and AI capabilities.

- In February 2021, Alibaba Cloud launched Elastic High-Performance Computing (E-HPC) instances, providing customers with faster processing power for complex computing tasks.

- In March 2021, Oracle announced the availability of new services and capabilities for its Oracle Cloud Infrastructure, including a new fleet of compute instances and GPU-based virtual machine shapes.

- In April 2021, VMware announced the acquisition of Mesh7, a company specializing in API security, to enhance its Tanzu portfolio for modern application development.

- In May 2021, Tencent Cloud introduced its multi-cloud architecture, allowing customers to seamlessly manage resources across different cloud platforms.

- In June 2021, Salesforce announced the acquisition of Slack, a leading team communication and collaboration platform, to enhance its customer engagement and productivity offerings.

- In July 2021, Hewlett Packard Enterprise (HPE) unveiled its GreenLake Lighthouse initiative, expanding its as-a-service offerings to deliver more flexible and sustainable IT solutions.

Significant Growth Factors:

Factors that are fueling expansion in the Infrastructure as a Service (IaaS) sector consist of the escalating need for adaptable and scalable IT infrastructure options, the increasing embrace of cloud computing technologies, and a heightened emphasis on cost savings by businesses.

The Infrastructure as a Service (IaaS) sector is witnessing remarkable growth propelled by various significant factors. Initially, the escalating utilization of cloud computing technology in diverse sectors is stimulating the desire for IaaS solutions. Companies are acknowledging the advantages of delegating their infrastructure requirements to external service providers, which furnish scalability, adaptability, and cost-effectiveness. Additionally, the surging prevalence of digital transformation endeavors is stoking the interest in IaaS due to its capability to serve as a groundwork for the development and deployment of contemporary applications. Furthermore, the increasing necessity for data storage and management solutions is bolstering the advancement of the IaaS arena. Given the exponential surge in data produced by individuals and corporations, there is a requirement for dependable and secure infrastructure to handle and store this data. Moreover, the call for disaster recovery and business continuity alternatives is fostering the uptake of IaaS, as it presents a dependable and scalable infrastructure for these objectives. Lastly, the mounting emphasis on energy efficiency and sustainability is propelling the expansion of the IaaS sector, as cloud service providers can exploit economies of scale to enhance energy usage. In essence, these determinants are contributing to the swift growth of the Infrastructure as a Service (IaaS) domain.

Restraining Factors:

One of the main obstacles to the expansion of the Infrastructure as a Service (IaaS) market is the lack of comprehensive oversight of data security and privacy measures.

The Infrastructure as a Service (IaaS) sector has experienced rapid expansion recently, propelled by the surging popularity of cloud computing solutions. Nevertheless, several inhibiting factors may impede the market's advancement. Primarily, concerns revolving around data security and privacy persist as obstacles to the widespread acceptance of IaaS. Many enterprises are hesitant to transition their data and software to the cloud owing to apprehensions regarding data breaches and unauthorized intrusions.

Moreover, the intricate nature of implementing and managing IaaS solutions can prove to be a substantial hurdle for organizations lacking the requisite technical know-how. Additionally, the expenses linked to integrating traditional systems and applications with cloud infrastructure can be prohibitive, posing a barrier to smaller businesses with limited resources in adopting IaaS.

Furthermore, regulatory and compliance predicaments present challenges for companies operating in tightly regulated sectors such as finance and healthcare, where strict data protection protocols must be complied with.

Lastly, the absence of standardized industry protocols and interoperability among various IaaS providers may result in confusion and restrict adaptability for organizations. Despite these obstacles, the IaaS market exhibits vast growth potential. Ongoing initiatives to fortify data security, create user-friendly solutions, and resolve interoperability challenges are underway, which are anticipated to propel increased adoption of IaaS in the forthcoming years. As enterprises increasingly appreciate the scalability, cost-effectiveness, and versatility offered by IaaS, the market is projected to surmount these restraining factors and undergo substantial expansion in the future.

Key Segments of the Infrastructure as a Service (IaaS) Market 

Solution Overview 
• Managed hosting
• Disaster Recovery as a Service
• Storage as a Service
• Colocation
• Network management
• Content delivery
• High Performance Computing as a Service

Component Type Overview
• Storage
• Network
• Compute
• Others

Deployment Overview
• Private
• Public
• Hybrid

Enterprise Size Overview
• Large Enterprises
• SMEs

Industry Overview
• BFSI
• Government and Education
• Healthcare
• Telecom and IT
• Retail
• Manufacturing
• Media and Entertainment
• Others

Regional Overview

North America
• US
• Canada
• Mexico
Europe
• Germany
• France
• U.K
• Rest of Europe
Asia Pacific
• China
• Japan
• India
• Rest of Asia Pacific
Middle East and Africa
• Saudi Arabia
• UAE
• Rest of Middle East and Africa
Latin America
• Brazil
• Argentina
• Rest of Latin America