[119 Pages Report] The government cloud market is expected to grow from USD 15.4 billion in 2017 to USD 28.8 billion by 2022, at a Compound Annual Growth Rate (CAGR) of 13.4%. The report considers 2017 as the estimated year for the study and the market size forecast is done from 2017 to 2022. Factors such as growth in the digital content across government entities, easier access from remote end-points, and need for regulatory compliances are fueling the growth of the market of government cloud across the globe.

The objective of the report is to define, describe, and forecast the government cloud market size based on solutions, services, service model, deployment model, and region.

By Type, the services segment is expected to grow at the highest rate during the forecast period

Based on type, the government cloud market is segmented into solutions and services. The services segment includes integration and migration; training, consulting, and education; and support and maintenance. Lowering the cost, business agility, and business continuity, through a policy-driven and software-defined cloud, are the major driving factors, triggering government service organizations to shift to a cloud world. These services help in educating government employees about the strategic transformation, business assessment, solution assessment, RoI, and knowledge workshop. The benefits offered by education services are rapid adoption of updated technologies, improved individual and team productivity, and increased returns on software investments.

By Service model, the IaaS service model to hold the largest market size during the forecast period

The government cloud market is segmented based on service models into SaaS, PaaS, and IaaS. These service models are utilized for the deployment of software, platform, and infrastructure over the internet. Among the mention service models, IaaS holds largest market size as it provides is the capability to transfer work to the cloud at the time of peak demand for on-premises systems. This helps users save their capital resource that may get used for the cost of additional servers. IaaS supports the government agencies and help them realize their cost savings and efficiencies while modernizing and expanding their IT capabilities with limited capital resources.

North America to account for the largest market size during the forecast period.

North America is expected to hold the highest market share and dominate the government cloud market during the forecast period. North America is the foremost potential market due to the presence of a large number of players offering government cloud solutions and services in this region. North America is the most mature region in the government cloud market, as most of the large enterprises are located in this region. APAC is expected to witness the highest growth rate during the forecast period, owing to the rapid development of the required infrastructure and the urge to adopt new technologies. MEA and Latin America are estimated to hold the least market size in 2017, as they are still developing their infrastructure. Government agencies in these regions have also realized the importance of government cloud adoption as a viable solution to achieve effective and efficient operations to ensure smooth business continuity.

Market Dynamics

Driver: Greater storage and computing capabilities

Federal agencies and other government departments across the globe are realizing the importance of maintaining and controlling cloud data for continuity and compliance purposes. The government cloud helps these agencies manage and store their data securely and efficiently. This results in enhanced and unified teams that can handle bigger projects at an effective cost. Cloud hosting services can be advantageous for government agencies and other small departments. These services can be rented for the computing power and data storage requirements, as often as needed, rather than incurring a one-time investment for procuring the servers and handling the ongoing expenses for maintaining the expensive data centers. Furthermore, the government cloud provides greater computing capabilities when implementing disaster recovery solutions, as it enables government agencies to configure customized settings for backup, with regards to the data and application types, sequence, and backup location. It involves the replication of application and data on a virtual machine, and the data can be recovered automatically when a disruption occurs.

Restraint: Varying structure of the regulatory policies

Regulatory policies vary from country to country and organization to organization. Many countries do not have a consigned body to govern these policies. Therefore, the policies have to be regulated and implemented taking into account the regional factors, such as macroeconomic risk factors, along with the business requirements. Organizations have started implementing risk and compliance solutions along with audit management solutions to help overcome this restraint. The structure of the varying regulatory policies along with the changing macroeconomic factors make it difficult for vendors to meet the government agencies� requirements. Some organizations, especially in the regions where there are no proper governing and regulatory bodies, tend to implement in-house regulatory guidelines and policies.

Opportunity: Increasing adoption of IAM

With the growth in the use of cloud, managing and securing multiple accounts via cloud is increasing at a fast pace. This has resulted in the increased adoption of IAM solutions. Earlier, organizations used to consider IAM as a capital expenditure, which was purchased and implemented on-premises. There was a huge cost structure associated with the successful implementation of IAM projects, which required months of rigorous work. However, the trend is now changing continuously, due to the growing cloud market. Implementing and accessing IAM solutions and services via cloud have become easier, due to the limited capital required for the initiation and the less time spent on implementation. With the growth of SMEs, the adoption of IAM solutions across organizations has also increased.

Challenge: Reluctance of government agencies to adopt the cloud technology

Cloud computing is a game-changing solution for all types of industries, especially the government sector. However, there still exist a large number of government agencies that express reluctance to adopt the cloud technology. This is primarily attributed to the lack of technological awareness, and privacy and security concerns. Though the government cloud market has grown significantly over the period, security and compliance have always been the key challenges faced by enterprises in this market. Government agencies are very sensitive when it comes to data storage on cloud-based platforms. Any disruption to the data will have a significant effect on the governmental operations. Due to this, many government agencies are reluctant to use the government cloud model. Therefore, cloud processes need to be monitored continuously to minimize risks and improve the security features.

Scope of the Report:

Report Metric Details Market size available for years 2015�2022 Base year considered 2016 Forecast period 2017�2022 Forecast units Value(USD Billion) Segments covered Type, Service Model, Deployment Model, and Region Geographies covered North America, Europe, APAC, MEA, and Latin America Companies covered It includes 24 major vendors, namely, AWS (US), Microsoft (US), IBM (US), Google (US), HPE (US), Oracle (US), Salesforce (US), Cisco Systems (US), Dell Technologies (US), VMware (US), Verizon (US), CGI Group (Canada), AT&T (US), SAP (Germany), NetApp (US), Informatica (US), Huddle (UK), Capgemini (France), CenturyLink (US), Citrix (US), Equinix (US), Fujitsu (Japan), NTT DATA (Japan), Red Hat (US), and NEC (Japan).

The research report segments the government cloud market into the following submarkets:

By Solutions

Cloud Storage

Disaster Recovery

Identity and Access Management (IAM)

Risk and compliance management

Others (reporting and analytics, and security and vulnerability)

By Services

Training, consulting, and education

Support and Maintenance

Integration and Migration

By Service Model

Infrastructure as a Service (IaaS)

Platform as a Service (PaaS)

Software as a Service (SaaS)

By Deployment Model

Public Cloud

Private Cloud

Hybrid Cloud

By Region

North America

Europe

Asia Pacific (APAC)

Middle East and Africa (MEA)

Latin America

Key Market Players

AWS (US), Microsoft (US), IBM (US), Google (US), HPE (US), Oracle (US), and Salesforce (US)

AWS is strategically focusing on expanding its market using various organic and inorganic strategies. The company has a strong foothold in the Americas, EMEA, and APAC, and it has been categorically focusing on expanding its foothold in the emerging markets, by making its products available to regional distributors, channel partners, resellers, service partners, and technology partners. Amazon Web Services offers a strong support service through its dense network of technology partners, located globally. The company leverages its internal R&D budget to cater to the needs of a wide class of enterprises, by deploying highly innovative and customized solutions and services. The company caters to various government departments, such as federal government, state and local government, defense and intelligence, and criminal justice and public safety, to expand its customer base. It is strongly focused on expanding its global footprint, and therefore, opened data centers in the UK and Canada. The company is expected to launch Amazon Web Services data centers in Sweden, Middle East, France, and China soon.

Recent Developments

In September 2017, Microsoft announced the availability of managed disks in Microsoft Azure Government cloud, to simplify disk management for Azure IaaS Virtual Machines (VMs) by managing the storage accounts associated with VM disks.

In September 2017, IBM partnered with VMware to announce that more than 1,400 enterprises, in nearly every industry vertical, around the world, are extending their VMware environments to the IBM Cloud. This partnership enabled customers to create new business opportunities, using IBM Cloud�s global reach, cloud-native services, and infrastructural and operational consistency.

In July 2017, AWS announced G3 instances, the next-generation of GPU-powered Amazon Elastic Compute Cloud (Amazon EC2) instances, designed with the powerful combination of Central Processing Unit (CPU) and Random Access Memory (RAM), for workloads such as 3D rendering, 3D visualizations, graphics-intensive remote workstations, video encoding, and virtual reality applications, for Amazon Web Services GovCloud (US).

Critical questions the report answers:

Where will all these developments take the industry in the long term?

What are the upcoming trends for the government cloud market?

Which segment provides the most opportunity for growth?

Who are the leading vendors operating in this market?

What are the opportunities for new market entrants?

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