Public cloud is a type of cloud computing service where infrastructure is accessed and shared by multiple users. With this cloud model, the physical and digital resources are owned by a third-party service provider.
Companies gain access to the public cloud through a subscription model, paying for the amount of resources their teams need. The public cloud is accessed remotely through the internet with no on-premises infrastructure needed.
See below to learn all about the global public cloud market:
Public cloud market
The public cloud market had an estimated value of $229.74 billion in 2020. Forecast to maintain a compound annual growth rate (CAGR) of 14.6% from 2020 to 2027, it’s expected to reach $596 billion by 2027.
Several geographic markets are leading demand in the public cloud market:
- The U.S. market was the largest segment at $84.2 billion in 2020
- The Chinese market is expected to grow at a 22.1% CAGR, reaching $222.5 billion by 2027
- Japan and Canada are projected to grow at a CAGR of 12% and 15.1% from 2020 to 2027
- Within European, Germany has one of the growth highest rates, with a CAGR 13.4% between 2020 to 2027
- Led by Australia, India, and South Korea, the Asia-Pacific market is forecast to reach $145.6 billion by 2027
- The Latin America is forecast to grow at a 16.8% CAGR over the period 2020 to 2027
Industry-wise, the banking, financial services, and insurance (BFSI) sector accounts for 25% of the public cloud market, as of 2019. Other notable industry verticals include:
- Retail and consumer goods
- Energy and utility
- Health care
- Media and entertainment
The pandemic’s impact on the public cloud market
The COVID-19 pandemic forced more companies to work remotely with little time to prepare. Lacking proper infrastructure, the majority resorted to using an efficient and cost-effective cloud computing solution: the public cloud.
The effects of the pandemic are expected to continue until 2024, where accommodations for remote work are forecast to account for 14.2% of the total spending of IT teams, an increase from 9.1% in 2020.
“The pandemic validated cloud’s value proposition. The ability to use on-demand, scalable cloud models to achieve cost-efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans,” said Sid Nag, research VP, Gartner.
“The increased use of public cloud services has reinforced cloud adoption to be the new normal, now more than ever.”
Public cloud features
The public cloud model is designed for a multi-tenant structure of users. At its core, the public cloud needs to make the same set of physical resources available to multiple users simultaneously, without compromising the privacy and security of each user.
Public clouds allow users to rapidly transmit and process massive amounts of data. This architecture enables companies to use large volumes of data resources while being cost-effective.
There are different types of the public cloud, depending on the level of services offered:
Software-as-a-service (SaaS) hosts software in the cloud, allowing numerous end users to remotely access the application. All storage and data processing power occur on the cloud, without requiring the use of any on-premises infrastructure.
Platform-as-a-service (PaaS) providers offer a ready-to-use cloud infrastructure platform for development. Customers can use the platform to develop their specialized software, without having to carry the burden of hosting their own servers and infrastructure in house.
Infrastructure-as-a-service (IaaS) providers offer cloud infrastructure, where the IT resources are accessed online and shared with other tenants.
End users can use IaaS to build their own platforms for software, relying on the provider to maintain the physical servers and virtualization of resources.
“Within the public cloud’s flexible computing ecosystem, Microsoft, Amazon, IBM, and other tech companies can provide access to computing power, storage, and platform software services, charging users for services consumed while getting access to vast amounts of computing power virtually on-demand,” says Mark Schlesinger, a member of the Forbes Technology Council.
Benefits of public cloud
Switching to a public cloud model for computing, storage, and processing can provide several key benefits to companies:
- Reduced costs with a pay-per-use pricing model
- No maintenance efforts are required on-premises
- Instantaneous and scalability
- High flexibility based on resource demand
- Remote access
- Automatic updates and configurations
- Reduces the burden on internal IT teams
- Eliminates the need for dedicated IT teams
- Outsourcing of data security and privacy requirements
Public Cloud Use Cases
The following case studies show how organizations in different industries are using the public cloud to help solve their IT challenges:
Capital One Enterprise
Capital One Enterprise is a financial corporation that specializes in credit cards, auto loans, and banking and offers multiple account types at their banks. Headquartered in McLean, Virginia, they primarily operate in the U.S.
The company was already invested in the cloud, especially AWS, when they started considering upscaling their infrastructure. When choosing between devoting more resources to on-premises infrastructure growth or moving to the public cloud, Capital One chose the public cloud to offer better services to their customers.
“In everything we do at Capital One, we always start from what our customers need and work back from there to figure out how to give it to them,” says George Brady, EVP and CTO, Capital One Enterprise.
“The most important benefit of working with AWS is that we don’t have to worry about building and operating the infrastructure necessary to do that and can instead focus our time, money, and energy on creating great experiences for our customers.”
Capital One was able to power their agile DevOps processes and deploy new features in weeks instead of months or years.
Migrate is a financial technology company that’s responsible for issuing and managing electronic tax documents in Brazil, Uruguay, and Paraguay. Established in 2004 and based in Brazil, Migrate employs 70 employees, serving over 30,000 customers.
Since tax documents are critical and time-sensitive, Migrate needed a platform that’s available 24/7 and fully reliable for its customers. With Google Cloud and its partner, Avenue Code, Migrate was able to move its infrastructure and SQL production servers to the public cloud in a short period of time.
“Google Cloud’s app suite, integrations, and management panel were all aspects we held in high regard, especially the cloud-native concept,” says Adilson Weddingen, CEO, Migrate.
“Services providing stability and scalability as well as many other possibilities, were factors that influenced our choice.”
Since moving to the public cloud, Migration was able to cut down new server creation time from 24 hours to just two minutes and reduce operating costs by 15%-20%.
Del Monte Foods
Del Monte Foods is one of the top food production and distribution companies in North America.
In order to maintain an edge in their competitive market, Walnut Creek, California-based Del Monte moved their 200 servers to the public cloud with the help of Accenture. This allowed Del Monte to meet customer expectations of online brand availability.
“We needed a partner that would understand how our systems worked and then how to migrate them, without creating any negative user experience — that had expertise in Amazon, in the AWS system architecture,” says PJ Balsley, IT director, Del Monte Foods.
“We can support our end users in a faster, more live context, which allows us to be more innovative in our food industry.”
Completing the migration in under four months, Del Monte Foods was able to achieve higher rates of stability and efficiency as well as gain more visibility into their servers and improve overall security.
Public cloud providers
Some of the leading vendors in the public cloud market include: