Hyperscale Cloud Market: Analysis By Application, By Enterprise Size, By End-User, By Region Size and Trends and Forecast up to 2029

In 2023, the global hyperscale cloud market was valued at US$320.59 billion and is expected to grow to US$1.44 trillion by 2029. The term “hyperscale” refers to scalable cloud computing systems in which a very large number of servers are networked together. The number of servers used at any one time can increase or decrease to respond to changing requirements. This means the network can efficiently handle both large and small volumes of data traffic.

Market Segmentation Analysis:

By Application: The report provides the bifurcation of the hyperscale cloud market based on the following application: Cloud Computing, IoT Application, Big Data Analytics, and Others. The cloud computing segment held the highest share of the market, whereas big data analytics segment is expected to be the fastest-growing segment in the forecasted period. The demand for hyperscale cloud in cloud computing is surging due to the growing need for scalable, efficient, and cost-effective infrastructure. Businesses of all sizes, from startups to large enterprises, are increasingly migrating their operations to the cloud to enhance agility, reduce capital expenditure, and optimize IT management.

Hyperscale cloud infrastructure provides the ability to handle massive workloads and scale resources dynamically, making it ideal for businesses with fluctuating demand. On the other hand, demand for hyperscale in big data analytics segment would grow as businesses are increasingly using advanced analytics, including machine learning and artificial intelligence, to analyze customer behavior, optimize operations, and predict trends. Hyperscale clouds enable these organizations to process and analyze terabytes or even petabytes of data in real time, offering the scalability needed to accommodate growing datasets without significant upfront investments in physical infrastructure.

By Enterprise Size: The report provides the glimpse of hyperscale cloud market based on the enterprise size: Large Enterprise and Small and Medium Sized Enterprises. The large enterprise segment held the highest share of the market, whereas small and medium sized enterprises segment is expected to be the fastest-growing segment in the forecasted period. The demand for hyperscale cloud solutions is increasing among large enterprises due to their need for massive computational power, vast storage capacities, and advanced security features.

Large enterprises often operate across multiple regions and industries, requiring cloud infrastructure that can handle complex, global-scale operations with high availability and performance. Hyperscale cloud platforms provide the scalability to manage enormous workloads, enabling these enterprises to scale up or down based on fluctuating demands without the need for significant investments in physical infrastructure. Whereas, the demand for hyperscale cloud among small and medium-sized enterprises (SMEs) is increasing due to the accessibility, flexibility, and cost-effectiveness it offers.Unlike large enterprises, SMEs typically have limited budgets and IT resources, making it impractical to invest heavily in their own physical infrastructure. Hyperscale cloud providers offer pay-as-you-go models, allowing SMEs to leverage enterprise-level infrastructure without the need for upfront capital investment.

By End-User: The report provides the bifurcation of the hyperscale cloud market into nine segments based on end-user: BFSI, IT & Telecom, Retail & Consumer Goods, Media & Entertainment, Manufacturing, Energy & Utilities, Government & Public Sector, Healthcare, and Others. In 2023, the BFSI segment led the hyperscale cloud market, owing to the increasing number of banking applications, which has resulted in the exponential growth of data in the banking and financial services industry. The manufacturing hyperscale cloud market is expected to grow at the highest CAGR. The scope for scaling operations up and down via the cloud enables manufacturing companies to mitigate market demand volatility. The future of all levels of the manufacturing industry is expected to incorporate cloud computing technology to stay more securely connected with consumers and the supply chain, hence contributing to market growth.

By Region: In the report, the global hyperscale cloud market is divided into five regions: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. North America dominated the market in 2023 due to the presence of well-established providers of hyperscale computing and increasing investment in technological advancements. North America is further divided into three regions: The US, Canada, and Mexico. The emergence of 5G technology along with growth in Industrial IoT (IIoT), complemented by technologies like big data, blockchain, and artificial intelligence (AI) would boost the adoption of hyperscale cloud services in the US.

The hyperscale cloud market in the Asia Pacific is expected to grow significantly in the coming years due to the presence of various developing countries and a growing number of hyperscale data centers, China held a major share in the Asia Pacific hyperscale cloud market in 2023. China’s appetite for cloud infrastructure services continues to outpace the rest of the world, with the government making it one of its top strategic priorities - driven by the continued expansion of online services and digitization of processes and operations within enterprises and government organizations.

Germany is one of the leading cloud markets in Europe. Germany’s sophisticated economy is one of the major drivers of advancing digitalization in all areas of personal life and business. Further, Germany’s well-established infrastructure and consumer base are driving the demand for hyperscale cloud services in the country.

Global Hyperscale Cloud Market Dynamics:

Growth Drivers: One of the most important factors impacting hyperscale cloud market dynamics is the increasing adoption of cloud in SMEs. Most IT enterprises in SMEs need the advanced technology of cloud computing services to flourish their businesses and leave their footprints in various geographies. An increase in the demand for cloud computing by SMEs led to growth in the hyperscale cloud market. Furthermore, the market has been growing over the past few years, due to factors such as increasing penetration of IoT devices, growing usage of video streaming apps, growing adoption of AI, growing internet traffic, and an increasing number of data centers, etc.

Challenges: However, the market has been confronted with some challenges specifically, insecurity of data, need to incur huge capital expenditure as technology advances, etc.

Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such as SaaS vendors re-platform onto hyperscale infrastructure, acceleration of digital transformation, hyperscalers dominating the IT spending, increasing 5G adoption, escalating edge computing, big data analytics, etc. The spending on IT would increase significantly, with companies increasingly using IT to digitalize their service offerings. The three main hyperscalers are as likely to dominate the new additional total addressable market (TAM) as they increasingly become integrated into company service offerings. This would allow the hyperscalers to maintain high levels of growth over the coming years.

Impact Analysis of COVID-19 and Way Forward:

Due to the pandemic, most companies have increased their cloud usage by more than they planned, resulting in higher cloud spending. In fact, according to a recent study by McKinsey & Company, companies globally have accelerated their cloud adoption compared to pre-pandemic adoption rates. This marks a significant shift in the use of cloud-based solutions, from purely data storage solutions to environments in which data is used transactionally and supports day-to-day business operations. Therefore, an increase in the demand for cloud computing services has led to significant growth in the hyperscale cloud market. Demand for hyperscaling would continue to be driven by the accelerated digital transformation post-COVID, which would see corporates accelerate their shifting of on-premise systems to the cloud, and the adoption of hyperscale platforms as the main resource for software development, testing, and deployment.

Competitive Landscape:

The global hyperscale cloud market is highly concentrated, with few major players holding almost two-third of the market share.

The key players of the global hyperscale cloud market are:

• Amazon.Com, Inc. (Amazon Web Services, Inc.)
• Microsoft Corp. (Microsoft Azure)
• Alphabet Inc. (Google Cloud Platform)
• Alibaba Group (Alibaba Cloud)
• Oracle Corporation
• IBM
• Apple Inc.
• Fujitsu Limited
• Broadcom Inc. (VMware, Inc.)
• Salesforce, Inc.

The top infrastructure cloud providers, called hyperscalers, such as AWS, continue to invest massively in their data centres. In the hyperscale revolution, Amazon, Google and Microsoft used their software development skills to disrupt several traditional industries, such as retailing (Amazon.com), advertising (Google Search) and productivity (Microsoft Office 365). Then, these hyperscalers have extended their capabilities in data processing and IT networking to disrupt the IT industry itself, providing massive storage and computing platforms to enterprises, replacing the need to own datacenters filled with servers and customised software. This act is set to accelerate further over the next few years, with COVID triggering an acceleration of digitalisation trends.