Cloud Storage Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Cloud Storage Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Global Cloud Storage Market is envisioned to grow at a CAGR of 25.21% over the forecast period. Increasing demand for low-cost data backup, storage, and protection across all enterprises, coupled with the need to handle data generated by augmented usage of mobile technologies, favors the adoption rate of cloud storage.

Key Highlights

• The cloud storage market is expected to increase due to rising data volumes across enterprises and the growing need to provide remote workers with ubiquitous access to data and files. For instance, according to Seagate Technologies Holdings Plc., from 2020 to 2022, total enterprise data volume is expected to go from approximately one petabyte (PB) to 2.02 petabytes. This is a 42.2% average annual growth over two years.
• Further, the total volume of data/information created, captured, copied, and consumed worldwide is expected to reach 181 zettabytes in 2025 from 79 zettabytes in 2021. Further, the World Economic Forum estimates that, by 2025, 463 exabytes of data will be created globally, equivalent to 212,765 thousand DVDs per day.
• Moreover, the increasing demand for low-cost data backup and protection across all enterprises, coupled with the necessity of handling the data generated by augmented usage of mobile technologies, favors cloud storage adoption. Companies regularly find ways to mitigate their operating costs and increase profit margins, which can be done by outsourcing or adopting managed cloud services from third-party vendors.
• Through strategic partnerships, mergers & acquisitions, research & developments, some of the prominent players in the market have been able to further develop the technology. This will fuel the demand for cloud storage over the forecast period. For instance, in 2020, Facilis Technology announced that it had entered into a strategic partnership with Qualstar on Object Cloud storage solutions.
• According to Cushman & Wakefield's Datacenter updates 2021, Construction of more than 200 MW of Data Centers are underway in each Northern Virginia, Silicon Valley, Chicago, and Atlanta, of which self-builds for Microsoft, Amazon, and Facebook feature prominently in phased build.
• Amid the pandemic, many countries mandated work from home due to public health safety concerns that drove the need for remote working infrastructure. Thus, organizations at all levels, including government bodies, expected a wide range of potential impacts, such as increased demand for virtual services, coupled with rising citizen expectations around the delivery of these services, the long-term potential for reshaping the government workforce, and the need to provide adaptive and dynamic regulatory models.

Key Market TrendsBFSI Sector is Expected to Hold a Significant Share

• To improve revenue generation, banks increase customer insights, contain costs, deliver market-relevant products quickly and efficiently, and help monetize enterprise data assets; they have started digitizing their work by introducing online portals through which a user can directly meet his work without any requirement for a bank official's intervention. This further results in a substantial increase in data generation, propelling such institutions to adopt cloud storage.
• Banking service providers worldwide are adopting cloud storage solutions as it enables banks to synchronize the enterprise, break down operational and data silos across risk, finance, regulatory, and customer support, and allow institutions to combine massive data sets in one place for advanced analytics and integrated insights.
• Increasing initiatives from technology vendors to help the BFSI players transition into the cloud also fuel this segment's growth. For instance, In July 2021, Tata Communications launched 'IZOTM Financial Cloud,' a community cloud platform tailored to fulfill Indian authorities' demanding data privacy, protection compliance, and security criteria for the banking, financial services, and insurance (BFSI) sector.
• It will also help the industry flourish in the future by acting as a platform for emerging technologies like artificial intelligence (AI), machine learning (ML), and blockchain. Despite the uncertainty caused by the pandemic, it created opportunities for new business models powered by emerging technologies. For many financial services organizations, the hybrid multi-cloud approach is now a global standard, and digital transformation will be more selective going forward.
• According to Finder, in 2021, the Digital-only banks will have more than 14 million customers from Britain and are expected to grow by 10 million by the year 2026. This indicates that such an increase would require solutions like cloud storage to handle the surge, thereby boosting the growth of cloud storage over the forecast period.
• The rising data breaches in the banking sector are driving the banks to adopt cloud storage that enables them to store data in a space managed and owned by the bank or a third party, providing enhanced security to the end-user. This is expected to increase cloud storage adoption over the forecast period.

North America is Expected to Hold the Largest Share

• North America is predicted to hold a major share owing to the early adoption of new technologies, huge investments in R&D for cloud-based solutions, and enhanced IT infrastructure. Moreover, cheap and secure storage options result in rapid industrial development.
• The North American region has a strong foothold of vendors in the market. Some of them include Google LLC, IBM Corporation, Microsoft Corporation, Oracle Corporation, and Amazon Web Services Inc. Through research and development, these prominent players in the region have been able to develop the technology further. This is expected to boost the adoption of cloud storage and reduce the cost of cloud storage throughout the forecast period.
• According to a report published by Stormforge, in April 2021, 18% of respondents from North America stated that their organization has a monthly cloud spend that ranges between USD 100,000 and USD 250,000. Further, 44% expect cloud spending to increase over the next 12 months, while another 32% indicate that they expect their organization's cloud spending to increase significantly over the next 12 months.
• Moreover, the government of Canada has adopted a "cloud-first" strategy, whereby cloud services are identified and estimated as the principal delivery option when initiating information technology investments, initiatives, strategies, and projects. The cloud will also let the government harness the innovation of private-sector providers and thus make its information technology more agile. Such initiatives are expected to offer plenty of opportunities to the hybrid cloud market, as this model enables private cloud security and public cloud flexibility.
• In 2021, Coca-Cola bottlers in North America collaborated with Salesforce for digital power transformation. The largest bottlers of the Coca-Cola system in the United States, through their IT Shared Services Provider CONA Services LLC (Coke One North America), leveraged Salesforce's Consumer Goods Cloud to facilitate profitable growth and deliver personalized B2B customer experiences.

Competitive Landscape

The competitive rivalry in the cloud storage market is high owing to some major players, such as Microsoft, IBM, and Oracle. Their ability to continually innovate their offerings has allowed them to gain a competitive advantage over others. Through strategic partnerships, research and developments, and mergers & acquisitions, these players have gained a more significant footprint in the market.

• May 2022 - Red Hat and Accenture expanded their nearly 12-year strategic partnership to advance power open hybrid cloud innovation for enterprises worldwide. The companies are partnering to invest in the co-development of new solutions to help in a seamless navigation of a multi- and hybrid cloud world, define their strategy, and accelerate their pace of innovation to get to value faster.
• October 2021 - Oracle announced plans to expand its cloud region footprint to support robust customer demand for Oracle Cloud services worldwide. In 2022, Oracle will open 14 cloud regions with new locations across the Middle East, Europe, Latin America, and Asia -Pacific. The company's upcoming cloud regions comprise Milan (Italy), Marseille (France), Stockholm (Sweden), Spain, Singapore, Jerusalem (Israel), Johannesburg (South Africa), Colombia, and Mexico. Additional second regions would open in Saudi Arabia, Abu Dhabi (UAE), France, Israel, and Chile. Oracle intends to have at least 44 cloud regions by the end of 2022.
• September 2021 - Telefonica España announced a partnership with Oracle in a multi-year collaboration to relocate its database to Oracle Exadata Cloud. This collaboration helps in the cloud adoption and the advancement of new communication services for consumers and businesses of telecom companies.

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