Infrastructure as a service (IaaS) is a form of cloud computing that provides virtualized computing resources over the Internet. Organizations utilize IaaS for compute, storage, networking, and other fundamental computing resources where they can deploy and run arbitrary software, which can include operating systems and applications. IaaS is helpful for organizations looking to avoid upfront infrastructure costs, and focus on variable drainage models to reduce overall IT costs. Some key uses of IaaS include web services, email hosting, virtual desktop infrastructure, database hosting, and disaster recovery.
The global IaaS Market is estimated to be valued at US$ 74.22 billion in 2024 and is expected to exhibit a CAGR of 8.0% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
Growing need for reducing IT capital expenditure is expected to drive the growth of the infrastructure as a service market over the forecast period. Infrastructure as a service helps organizations to avoid upfront infrastructure costs such as hardware acquisition, maintenance, and support. IaaS allows organizations to pay as per their usage which reduces IT capital expenditure and lowers operational costs. Additionally, need for flexible and scalable infrastructure is also expected to propel the market growth. IaaS provides on-demand infrastructure that can scale up or down as per changing business needs of organizations. Infrastructure in IaaS model can be provisioned and deprovisioned automatically based on workloads. These factors are expected to boost the adoption of infrastructure as a service among organizations looking to optimize IT costs and resources.
Furthermore, growing adoption of hybrid cloud is also anticipated to fuel the demand for IaaS over the forecast period. Hybrid cloud offers the flexibility of public cloud along with security and governance of private cloud. In hybrid cloud model, IaaS plays a vital role in connecting private and public cloud infrastructure. Organizations leverage hybrid cloud solutions to optimize workloads between on-premises private and off-premises public clouds. This flexibility of hybrid cloud is expected to drive its adoption rate globally thereby positively impacting the IaaS market growth.
Segment Analysis
The infrastructure as-a-service market is segmented by type into disaster recovery as a service (DRaaS), storage as a service (STaaS), compute as a service (CaaS), and network as a service (NaaS). Among these, the compute as a service segment is dominating the market. This is because, CaaS offers elastic and scalable computing resources including servers, operating systems, middleware, network, storage and memory on-demand. It allows businesses to focus on their core operations by reducing IT costs related to managing hardware.
PEST Analysis
Political: Governments across the globe are promoting digitalization and cloud adoption among businesses and organizations. Some countries provide tax incentives for cloud computing investments to drive economy digitization.
Economic: Cost savings from operational efficiencies of IaaS is driving its adoption across industries. Businesses can avoid upfront capital expenditure on hardware and infrastructure through pay-as-you-go model of IaaS.
Social: Growing preference of users for flexible and scalable IT infrastructure from cloud for easy access of data and services from any location is fueling IaaS demand.
Technological: Advances in virtualization, high-speed networking and cloud technologies have enabled on-demand provisioning of computing resources over the internet. This has improved agility, scalability and economies of scale for businesses through IaaS.
Key Takeaways
The Global Infrastructure As A Service Market Size was valued at US$ 74.22 Bn in 2024 and is expected to grow at a CAGR of 8.0% during the forecast period.
North America region dominated the market in 2024 with a share of around 40% owing to strong presence of major IaaS providers in the region including Amazon Web Services, Microsoft Azure and IBM Cloud.
Key players operating in the infrastructure as-a-service market are Rubicon Technology Inc., KYOCERA Corporation, Saint-Gobain, SCHOTT AG, Monocrystal, Rayotek Scientific Inc., CRYSTALWISE TECHNOLOGY INC., ILJIN Display CO. Ltd, Namiki Precision Jewel Co., Ltd., Juropol Sp. z o.o. Major players are focusing on developing new cloud-based services and solutions to gain competitive advantage. They are also strengthening partnerships with technology vendors and system integrators to expand their customer base.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
