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Hybrid Cloud Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

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  • 170 Pages
  • August 2023
  • Region: Global
  • Mordor Intelligence
  • ID: 4591770
The Hybrid Cloud Market size is estimated at USD 129.43 billion in 2023 and is expected to reach USD 348.53 billion by 2028, growing at a CAGR of 21.91% during the forecast period.

The growth of cloud and industrialized services and the decline of traditional data center outsourcing (DCO) indicate a massive shift toward hybrid infrastructure services. In comparison, the conventional DCO market is shrinking, spending on colocation and hosting along with the increase in infrastructure utility services. This is expected to drive the shift toward cloud IaaS and hosting. Owing to its benefits, hybrid cloud deployment occupies a continuously increasing share of the cloud market.

Key Highlights

  • The hybrid cloud market has experienced significant overall growth compared to other cloud services in the past few years. It offers certain benefits to organizations with a huge data set and needs processing demand.
  • Using a hybrid cloud allows companies to scale computing resources and helps eliminate the need to invest massive capital in handling short-term spikes in demand when the business needs to free up local resources for more sensitive data or applications.
  • When computing and processing demand fluctuates, hybrid cloud computing gives businesses the ability to scale their on-premises infrastructure up to the public cloud to handle any overflow without giving third-party data centers access to the entirety of their data. These developments have effectively addressed the concerns of the end-users, who were concerned about their data security and were initially hesitant to switch to this solution.
  • Companies using cloud services must pay only for resources they temporarily use instead of purchasing, programming, and maintaining additional resources and equipment idle over long periods. This helps the companies in minimalizing costs that do not generate revenue.
  • Amid the COVID pandemic, many countries across the globe mandated work from home based on public health safety concerns that drove the need for remote working infrastructure. Therefore, organizations operating 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 longer-term potential for reshaping the government workforce, and the need to provide adaptive and dynamic regulatory models.
  • Further, government organizations are shifting focus on adopting Hyperscale cloud that includes benefits such as data center modernization, unified operations, security and governance, and application innovation. A hybrid cloud can foster such needs. In addition, the cloud enables handling cyclical demands or emergency needs without overprovisioning large amounts of hardware for government organizations.

Hybrid Cloud Market Trends

Banking, Finance, Services, and Insurance (BFSI) Sector to Hold Major Share in the Market

  • The banking sector has been using the hybrid cloud model, through which critical banking processes and applications are migrated to private clouds for better security. Moreover, non-critical applications are moving to the public cloud for agility and cost efficiency.
  • As the majority of the banks’ IT spending is primarily on maintaining their legacy technologies, along with managing and maintaining disparate systems, this situation has forced them to invest in a hybrid cloud solution that involves a mix of on-premise private and public cloud services to achieve greater scalability and integrated communication between disparate systems.
  • Hybrid cloud is also increasingly being adopted to tackle issues in this sector. These issues include the increased number of transactions without cards, the digitization of several bank branches, the shift to remote working systems, the need for online documentation, etc.
  • Modifying the hybrid cloud for banking leads to cost reduction, increases efficiency, and enables banks to manage their customers better, resulting in the growth of hybrid cloud in the BFSI industry.
  • The growth of hybrid cloud in the BFSI industry worldwide is driven by a shift in consumers’ preference toward hybrid cloud, an increase in digital disruptions, and technological advances like the integration of edge computing, the Internet of Things (IoT), and artificial intelligence. However, the COVID-19 pandemic led to a sharp rise in the hybrid cloud in the BFSI market globally, owing to increased demand for increased computing power across banks and the overall fintech sector.

North America to Hold Significant Market Share

  • North America is expected to hold a significant share of the hybrid cloud market. Many companies in the region are moving beyond the public cloud. They are stepping into a new era of hybrid IT services that combine public, private, and traditional IT infrastructure. Thus, these organizations have implemented a hybrid cloud strategy, aiding them in improving their business and delivering services to customers.
  • North America pioneered the bring-your-own-device (BYOD) culture, resulting in widespread incorporation. This has led organizations to shift toward hybrid cloud models to ensure the safety of sensitive business information via private cloud while providing a greater reach of applications to employees through public cloud solutions, which is necessary for some applications requiring on-field access. This trend was observed to benefit productivity, and it is expected to continue and grow during the forecast period. Canadian companies are also increasingly adopting the BYOD trend. With the increase in the adoption of tablets and smartphones for accessing business-critical information, the growth of BYOD in the country is expected to increase, which, in turn, is anticipated to impact the hybrid cloud market over the forecast period.
  • Additionally, the COVID-19 pandemic accelerated cloud usage for US companies in every industry. Many US enterprises prioritizing cloud adoption in their organization noted the increased importance of cloud due to the pandemic.
  • Moreover, to increase their consumer base and better meet demands across various applications, significant companies are also merging with other businesses and investing in new projects. For instance, in May 2023, IBM unveiled IBM Hybrid Cloud Mesh, a SaaS offering that is designed to enable enterprises to bring management to their hybrid multi-cloud infrastructure. Driven by "application-centric connectivity," IBM Hybrid Cloud Mesh is engineered to automate the process, management, and observability of application connectivity in and between public and private clouds to help modern enterprises operate their infrastructure across hybrid multi-cloud and heterogeneous environments.
  • Overall, the demand for flexibility, data security, cost reduction, digital transformation, enhanced analytics, and industry-specific requirements are some of the significant factors that are driving the hybrid cloud market in North America. Due to these reasons, businesses are being compelled to use hybrid cloud solutions in order to strike a balance between agility, control, and innovation.

Hybrid Cloud Industry Overview

The hybrid cloud industry is highly fragmented, with multiple significant competitors. Few major firms presently dominate the industry in terms of market share. These market leaders are concentrating on growing their consumer base in overseas nations. These businesses use collaborative strategic efforts to expand their market share and profitability. Companies in the industry are also purchasing start-ups focused on hybrid cloud computing technologies to boost their product abilities. Some key market players are Cisco Systems Inc., Hewlett-Packard Enterprise Company, Amazon Web Services (Amazon Inc.), Accenture PLC, and IBM Corporation, among others.

In March 2023, Flexera announced the general availability of Flexera One FinOps. This solution helps in strengthening an enterprise's FinOps and central cloud teams while enhancing the convergence of IT asset management (ITAM) and FinOps, empowering enterprises to significantly improve how they visualize and allocate cloud usage and billing, efficiently manage hybrid IT estates, and operate cloud at scale.

In March 2023, NTT Communications Corporation announced the launch of efforts involving digital humans and the virtual world as part of its business co-creation program, "OPEN HUB for Smart World," with the goal of broadening possibilities for all people, including those with workplace or time constraints. It plans to encourage solutions to address problems such as Japan's declining labor force participation.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

Table of Contents

1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Buyers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitutes
4.2.5 Intensity of Competitive Rivalry
4.3 Technology Snapshot
5.1 Market Drivers
5.1.1 Rising Need for Interoperability Standards Between Cloud Services and Existing Systems
5.1.2 The Ability to Offer Improved Business Performance and Greater Return on Investments as Businesses Embracing Digitalization
5.2 Market Challenges
5.2.1 Compliance Issues, Migration Complexity, and Security Risks
5.3 Assessment of the Impact of COVID-19 on the Market
6.1 By Type
6.1.1 Solutions
6.1.2 Services
6.2 By End-user Industry
6.2.1 Government and Public Sector
6.2.2 Healthcare
6.2.3 Banking, Finance, Services, and Insurance (BFSI)
6.2.4 Retail
6.2.5 Information and Communication Technology
6.2.6 Media and Entertainment
6.2.7 Other End-user Industries
6.3 By Geography
6.3.1 North America
6.3.2 Europe
6.3.3 Asia Pacific
6.3.4 Latin America
6.3.5 Middle East and Africa
7.1 Company Profiles*
7.1.1 Cisco Systems Inc.
7.1.2 Hewlett Packard Enterprise Company
7.1.3 Amazon Web Services (Amazon Inc.)
7.1.4 Accenture PLC
7.1.5 IBM Corporation
7.1.6 Alibaba Cloud (Alibaba Group Holding Limited)
7.1.7 Rackspace Technology Inc.
7.1.8 Oracle Corporation
7.1.9 Google LLC
7.1.10 Equinix Inc.
7.1.11 VMware Inc.
7.1.12 Panzura Inc.
7.1.13 Flexera Software LLC
7.1.14 Dell EMC (Dell Technologies Inc.)
7.1.15 Intel Corporation
7.1.16 Fujitsu Ltd
7.1.17 NTT Communications Corporation
7.1.18 DXC Technology Company
7.1.19 Lumen Technologies Inc.
7.1.20 Microsoft Corporation

Companies Mentioned (Partial List)

A selection of companies mentioned in this report includes, but is not limited to:

  • Cisco Systems Inc.
  • Hewlett Packard Enterprise Company
  • Amazon Web Services (Amazon Inc.)
  • Accenture PLC
  • IBM Corporation
  • Alibaba Cloud (Alibaba Group Holding Limited)
  • Rackspace Technology Inc.
  • Oracle Corporation
  • Google LLC
  • Equinix Inc.
  • VMware Inc.
  • Panzura Inc.
  • Flexera Software LLC
  • Dell EMC (Dell Technologies Inc.)
  • Intel Corporation
  • Fujitsu Ltd
  • NTT Communications Corporation
  • DXC Technology Company
  • Lumen Technologies Inc.
  • Microsoft Corporation