Public Cloud - Japan

Japan

Revenue in the Public Cloud market is projected to reach US$21.32bn in 2024.
Software as a Service dominates the market with a projected market volume of US$9.04bn in 2024.
Revenue is expected to show an annual growth rate (CAGR 2024-2029) of 17.76%, resulting in a market volume of US$48.29bn by 2029.
The average spend per employee in the Public Cloud market is projected to reach US$308.20 in 2024.
In global comparison, most revenue will be generated in the United States (US$388.50bn in 2024).

Key regions: United States, Germany, China, Japan, United Kingdom

Definition:

A public cloud is defined as the digital infrastructure and computing resources that are managed by a service provider. Examples of public cloud computing resources include virtual machines, storage, and services, all of which are available for purchase with flexible (e.g., pay as you go and subscription) business models. Such payment options make it possible for customers to access, scale, and utilize resources as needed. Public cloud solutions make it possible for users to save on IT costs, increase their efficiency, and take advantage of advanced technologies without having to invest in long-term IT solutions. Public cloud service providers own and maintain the physical infrastructure, hardware, and software. Users only need to pay for the computing resources that they require. The Public Cloud market refers to the companies that provide these cloud computing resources and services to individuals, businesses, and organizations.

Structure:

The Public Cloud market is structured into five markets based on the type of service models provided by the companies.

The Infrastructure as a Service (IaaS) market covers the resources and services related to the data center infrastructure.
The Platform as a Service (PaaS) market covers the resources and services related to the virtual environments used for software development.
The Software as a Service market (SaaS) market covers the resources and services related to software applications that can be accessed via a web browser.
The Business Process as a Service (BPaaS) market covers the resources and services related to the various business processes such as finance and accounting, human resources, customer service, and supply chain management, all delivered through the cloud.
The Desktop as a Service (DaaS) market covers the resources and services related to virtual desktop environments, which are accessible from any device with an internet connection.

Additional Information:

The public cloud market comprises revenue, revenue change, average spend per employee, and key player market shares as key performance indicators. Only revenues that are generated by primary vendors at the manufacturer price level either directly or through distribution channels (excluding value-added tax) are included, and revenues generated by resellers are excluded. Revenues are generated through both online and offline sales channels and include spending by consumers (B2C), enterprises (B2B) as well as governments (B2G). Detailed definitions of each market can be found on the respective page where the market data is displayed.

Key players of the public cloud market include companies such as Amazon (Amazon web services), Microsoft (Azure), Google (Cloud), and IBM (Cloud).

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Market

Region

Region comparison

Currency

Analyst Opinion

The Public Cloud market in Japan has been experiencing significant growth in recent years.

Customer preferences: Japanese customers have shown a strong preference for Public Cloud services due to their scalability, cost-effectiveness, and flexibility. The ability to easily scale up or down resources based on demand has been particularly appealing to businesses in Japan, as it allows them to quickly adapt to changing market conditions. Additionally, the cost savings associated with Public Cloud services have been a major driver for adoption, as businesses in Japan are always looking for ways to optimize their IT budgets. Furthermore, the flexibility offered by Public Cloud services allows businesses to innovate and experiment with new technologies without the need for significant upfront investments.

Trends in the market: One of the key trends in the Public Cloud market in Japan is the increasing adoption of hybrid cloud solutions. Many businesses in Japan have complex IT infrastructures that include both on-premises and cloud-based systems. Hybrid cloud solutions allow these businesses to seamlessly integrate their existing infrastructure with Public Cloud services, providing them with the best of both worlds. This trend is driven by the need for businesses to leverage the benefits of the cloud while still maintaining control over their sensitive data. Another trend in the market is the growing demand for industry-specific cloud solutions. Different industries in Japan have unique requirements and regulations, and there is a growing recognition that generic cloud solutions may not always meet these specific needs. As a result, cloud service providers are increasingly offering industry-specific solutions tailored to the needs of sectors such as healthcare, finance, and manufacturing. This trend is driven by the desire of businesses to leverage the cloud while ensuring compliance with industry regulations and standards.

Local special circumstances: Japan has a highly developed technology sector and is home to many innovative companies. This has created a favorable environment for the adoption of Public Cloud services, as businesses in Japan are often early adopters of new technologies. Additionally, the Japanese government has been actively promoting the adoption of cloud computing as part of its digital transformation initiatives. This has led to increased awareness and support for Public Cloud services among businesses in Japan.

Underlying macroeconomic factors: The growth of the Public Cloud market in Japan is also influenced by several macroeconomic factors. Japan has a large and mature economy, with a strong focus on technology and innovation. This provides a fertile ground for the adoption of Public Cloud services, as businesses in Japan are constantly looking for ways to stay competitive and drive efficiency. Additionally, the ongoing digital transformation efforts in Japan, driven by the government and private sector, have created a favorable environment for the growth of the Public Cloud market. These factors, combined with the increasing availability and affordability of high-speed internet connectivity in Japan, have contributed to the rapid growth of the Public Cloud market in the country.

Methodology

Data coverage:

The data encompasses B2B, B2G, and B2C enterprises. Figures are based on the money spent at manufacturer price level (excluding VAT).

Modeling approach / Market size:

Market sizes are determined through a top-down approach with a bottom-up validation, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and reports from our primary research. In addition, we use relevant key market indicators and data from country-specific associations, such as GDP and level of telecommunications infrastructure. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. The main drivers are the GDP and the level of digitization.

Additional notes:

The data is modeled using current exchange rates. The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.