Government Cloud Market Report: Global Size, Share, Strategic Developments, and Growth Potential Estimation, 2024-2030

Government Cloud Market Size & Share

The size of the government cloud market has been estimated at USD 40.2 Billion in 2023, and it will touch USD 102.2 Billion by 2030, powering at a rate of 14.5% between 2024 and 2030.

The growth of the industry is because of the rising need for compliant and secure data storage and management solutions across government agencies. In accordance with this, as cyber threats continuously advance, governments recognize the necessity for government clouds armed with strong cybersecurity measures, generating a positive position for industry growth.

 

• As per a report, cyber-attacks against government agencies as well as public sector services rise to 40 percent in the 2nd quarter of 2023 than the first.

Furthermore, the pandemic of COVID-19 has boosted the move toward digital government services. This has prompted governments across the globe to invest in cloud infrastructure to support digital citizen engagement, online service delivery, and remote work, aiding the industry expansion.

• As per the E-Government Survey 2022, there is a growing contribution of digital transformation & digital government in enhancing the realization of the 2030 Agenda for sustainable development and assuring that no one is left behind & offline in the digital era.
• Moreover, it also highlights the vital part that digital government tools have played in the fight against the pandemic of COVID–19.
• In the last two years, 90% of member states have created space in their national portals, or established dedicated portals, to address problems as well as public services associated with the COVID–19 pandemic.

Growth Drivers

• Rising Need for Large Data Handling from Remote Settings
• Increasing Funding from Government in R&D for Greater Functioning

The widespread use of the government cloud as a tool to access citizen data from remote settings regarding user logs, policies, and systems is one of the major growth factors. Moreover, another growth driver is the incorporation of cloud-based solutions, AI, and the Internet of Things (IoT) to enhance data backup, unstructured data sequencing, and disaster recovery. In addition, the swift Identity and Access Management (IAM) acceptance in numerous sectors is further boosting the growth of the industry. 

The continuous introduction of cloud-based government websites to promote transparency and accountability by minimizing activities such as corruption and increasing the need for cloud services in terms of virtual security systems aimed at smoothing out decision-making procedures has a positive impact on market development.

E-governance platforms as well as online portals produce massive quantities of citizen data.

• In Estonia, 99% of every government service is delivered online
• 99% of the populace has an electronic ID, and
• 98% of medical prescriptions are provided digitally.

Other drivers, including increasing levels of research & development funding for the introduction of advanced technological solutions and various steps taken by governments of numerous nations to develop infrastructure through cloud-based solutions that would reduce total cost of ownership and capital expenditure, are forming an encouraging position for this industry.

• For instance, Europe introduced the “GAIA-X initiative”, whose goal is to make a cloud infrastructure for the European country to break up the dominance of foreign companies, like the U.S.

Increasing Demand for Better Cloud Storage Capabilities is Key Trend

All types of digital data are increasing rapidly at an unprecedented rate all over the world. This is starting to become a challenge for governments across the world as they find themselves needing to manage such data efficiently with inventiveness and provide opportunities for the general welfare of their citizens.

• As per the International Data Corporation (IDC), the Global Datasphere will reach 175 zettabytes in 2025.

Cloud-based storage systems are becoming more popular partly due to the quantity of data being generated by numerous government agencies.

The high demand and acceptance rate of cloud storage is promoted by the growing requirement for cost-effective data storage, protection, and backups on all levels of government, along with the need to control the data created by the augmented adoption of mobile technologies.

Moreover, because of the increasing count of data breaches in the banking sector, government banks are employing cloud storage, which allows them to save information on a site that is either owned or maintained by a third party or by the bank itself, enhancing end-user security. This is likely to boost the acceptance of cloud storage during this decade.

Major Challenges

The lean IT teams are facing challenges in their effort to overcome current problems. Throughout the years, businesses have been concentrating on efficiency enhancement, process improvement, and cost control. However, the pandemic has forced them to focus on deployments, which is a rush toward the public cloud without enough due diligence; this has led to increased complexity costs and lower flexibility with minimal focus on achieving strategic business goals. 

With the increasing prevalence of multi-cloud deployments, businesses need to address a number of challenges associated with cloud resource management. Due to using several levels, each having the best practices and deployment guidelines, it takes quite some time to utilize cloud computing in multi-cloud systems. The degree of difficulty in managing cloud resources grows as the number of used cloud environments increases. The number of vendors also sheds on the burden of management, and no industry standards exist between cloud providers.

Thus, it is important to go through the measures and extents of course security before using their multi-cloud services.

Government Cloud Market Report Coverage

Report Attribute	Details
Market Size in 2023	USD 40.2 Billion
Revenue Forecast in 2030	USD 102.2 Billion
Growth Rate	14.5% CAGR
Historical Years	2017-2023
Forecast Years	2024-2030
Report Scope	Market Trends, Drivers, and Restraints; Revenue Estimation and Forecast; Segmentation Analysis; Impact of COVID-19; Companies’ Strategic Developments; Market Share Analysis of Key Players; Company Profiling

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Private Cloud Will Advance Rapidly

The private cloud category, on the basis of deployment type, is likely to advance rapidly in the years to come. 

• Private clouds are ideal for storing or processing sensitive information because the applications as well as information remain behind the firewall and are only accessible by the business. 
• Capability to migrate non-sensitive information to a public cloud to control the increase in demand on the private cloud.

These are the key reason that boosts the expansion of this category.

Software as a service Category is Largest Contributor

The SaaS model was the largest contributor to the industry. The growing demand for streamlined access to advanced software applications while decreasing infrastructure overhead is boosting the need for this solution. Moreover, many governments globally are progressively turning to SaaS offerings to properly control software updates or deployment.

In addition, SaaS has the advantage of software updates in an automatic process thus saving the IT team schedule and ensuring that the department always makes use of modern, protected software versions. Besides this, SaaS solutions provide remote accessibility for the benefit of government employees who can work from anywhere. This convenience as well as cost-efficiency are boosting the acceptance of the SaaS model in different public sector functions.

North America Leads Market

North America was the largest contributor to the industry, owing to constant concern for data security, advanced technology, and the requirement to have agile government services. Moreover, North American governments, especially Canada and the U.S. put great importance on securing sensitive information on the cloud which increases using secure governmental clouds that are compliant with very strict requirements like FISMA and FedRAMP.

• For instance, the U.S. Department of Defense (DoD), in 2021, declared the creation of the Joint Warfighting Cloud Capability, or JWCC, contract.
• A multi-vendor acquisition automobile intended to make cloud services as well as abilities accessible at all classification levels and in every security domain, from the enterprise to the tactical edge.
• Furthermore, the count of cyberattack reports by federal agencies in the U.S. in 2022 was more than 30 thousand.

Along with this, the speed at which technological advancement and digital transformation initiatives are developing in North America requires scalable as well as robust cloud infrastructure. In addition, as citizens become increasingly dependent on online services from state bodies, market players focus on a wide range of cloud solutions that deliver smooth and convenient digital user experience.

APAC is likely to advance rapidly during this decade. Different government initiatives have assisted the region's acceptance of cloud services, enabling it to improve its digital transformation as well as become a complete cloud computing center. Over the years, APAC nations have put effort into improving the ICT sector, building universal broadband infrastructure, encouraging extensive adoption of ICT across different industries, and establishing a strong legislative architecture to assist the development of new technology.

Government Cloud Market Competitive Landscape

The government cloud market is concentrated with key players, including Oracle Corporation, Microsoft Corporation, Google LLC, and International Business Machines Corporation. This entry barrier of this market is high as the present players have a strong position.

Other major players in the market include:

• CGI Inc.
• Amazon Web Services Inc.
• Cisco Systems Inc.
• Dell Corporation LTD
• Hewlett Packard Enterprise Development LP
• Network Appliance Inc.
• Verizon Communications Inc.
• VMware LLC

Recent Development

• January 2023: Dell Corporation LTD increases its portfolio to accelerate multi-cloud acceptance, providing a unified experience for data and applications across locations, as well as enhanced DevOps support and cloud environment selection.
• August 2022: Singapore’s Smart Nation and Digital Government Group and Google Cloud have inked an MOU to improve AI cooperation in Singapore.
• September 2022: Amazon Web Services Inc. declared that the Telangana government is working with Amazon Web Services to improve its Cloud Adoption Framework to advance the quality, speed, efficiency, and scale of citizen service delivery for its 40 million population.