Cloud C Cloud Computing - Industry Ttry Trrends & R egional Outlooks Report Summary - Fitch Solutions
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2020
www.fitchsolutions.com
Cloud C
Computing
omputing
Indus
Industry
try T
Trrends & R
Regional
egional
Outlooks
Report SummaryCloud Computing Industry Trends & Regional Outlooks | 2021
Contents
Overview........................................................................................................................................................................................... 5
Global Cloud Computing Outlook: Introduction.............................................................................................................................................................. 5
Cloud Computing 101 ................................................................................................................................................................................................................ 8
Technology: Making Sense Of Data.....................................................................................................................................................................................11
Industry Forecast.........................................................................................................................................................................18
North America: Maturing Market Sees Growth Slow, Political Risks Rise.............................................................................................................18
Latin America: Cloud Deployment Catch-Up Potential ..............................................................................................................................................23
Asia: Growing Competition To Underpin Strong Growth Outlook ..........................................................................................................................28
Europe: Hyperscalers' Investments Lay Foundations For Broader Cloud Spending .......................................................................................35
Sub-Saharan Africa: A Small Cloud Market, Growing Quickly ...................................................................................................................................42
Middle East & North Africa: GCC Cloud Spending Driven By Digital Transformation.......................................................................................48
Industry Risk/Reward Index ....................................................................................................................................................53
Americas' IT Markets Prove Robust As Pandemic Shifts Demand Profiles..........................................................................................................53
Rising Downside Risks Weigh On Europe IT Risk/Reward Index..............................................................................................................................56
Asia IT RRI Unmoved, But Pandemic Could Drag On Recovery................................................................................................................................59
ToC
Middle East And Africa IT Risk/Reward Index More Stable, But Markets Remain Under Pressure ............................................................61
Industry Trend Analysis.............................................................................................................................................................63
How Regionalisation Becomes The Splinternet.............................................................................................................................................................63
Quick View: Privacy Shield Ruling Further Divides US And EU On Digital Trade................................................................................................66
Telcos Look At Edge Computing, But Risks Remain High ..........................................................................................................................................67
UAE Cloud Sector Inching Towards Potential As Investment Gathers Pace.......................................................................................................70
New Microsoft Cloud Region To Support Greece's Digital Transformation.........................................................................................................72
Digital Realty: Scaling Up To Meet Future Remote Computing Needs .................................................................................................................74
Equinix: Stability And Strength In Asset Ownership, Move To Multi-Cloud Offerings......................................................................................79
Company Profile...........................................................................................................................................................................85
Alibaba Cloud ..............................................................................................................................................................................................................................85
IBM Cloud.......................................................................................................................................................................................................................................88
© 20
2020
20 Fit
Fitch
ch Solutions Gr
Group
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Limited.
ed. All rights rreserv
eserved.
ed.
All information, analysis, forecasts and data provided by Fitch Solutions Group Limited is for the exclusive use of subscribing persons or organisations (including those
using the service on a trial basis). All such content is copyrighted in the name of Fitch Solutions Group Limited and as such no part of this content may be reproduced,
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All content, including forecasts, analysis and opinion, has been based on information and sources believed to be accurate and reliable at the time of publishing. Fitch
Solutions Group Limited makes no representation of warranty of any kind as to the accuracy or completeness of any information provided, and accepts no liability
whatsoever for any loss or damage resulting from opinion, errors, inaccuracies or omissions affecting any part of the content.
This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 (‘FSG’). FSG is an
affiliate of Fitch Ratings Inc. (‘Fitch Ratings’). FSG is solely responsible for the content of this report, without any input from Fitch Ratings. Copyright © 2020 Fitch
Solutions Group Limited.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
fitchsolutions.com 3Cloud Computing Industry Trends & Regional Outlooks | 2021
Amazon Web Services ..............................................................................................................................................................................................................94
Microsoft Azure ........................................................................................................................................................................................................................ 101
Information Technology Methodology.............................................................................................................................. 106
ToC
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
fitchsolutions.com 4Cloud Computing Industry Trends & Regional Outlooks | 2021
Overview
Global Cloud Computing Outlook: Introduction
We at Fitch Solutions forecast the global market for cloud computing services to almost double in value over the next four years, to
reach USD523.1bn by 2024. The US will remain the single largest market for cloud-based services, solutions and infrastructure over
this time, but its overall share will diminish as opportunities for organic growth become fewer owing to market maturity. China will
continue to erode the US' dominant position, but the extent to which it will be able to do so will most likely depend on the outcome
of the US Presidential elections in late 2020. A new administration will be less combative, but it will also need to continue pushing
for US technological dominance that will extend across the whole digital services ecosystem.
We expect China's need to become less dependent on western technology to sustain its aggressive growth targets as well as its own
aims to become the superior force in disruptive technology such as artificial intelligence (AI) to drive its global expansion as a cloud
computing superpower over the next four years and beyond. The country is already leveraging its significant trade relationships
through its Belt and Road Initiative and is prepared to absorb considerable financial losses in the near term (through accelerated
research and development as well as seeding technology deployments in emerging and frontier markets) to ensure this self-
sustainability. Cloud computing will, therefore, be one of the many tools it uses to win and retain business.
GLOBAL CLOUD SPENDING (USDMN) - HISTORICAL DATA AND FORECASTS
2019 2020e 2021f 2022f 2023f 2024f
North America 118,133 147,221 173,220 190,094 199,716 210,261
Asia
Page 50,523
34,721
1 67,824 92,356 121,650 149,777
Europe 44,337 63,703 79,757 98,029 118,715 127,686
Latin America 4,822 6,178 7,978 10,866 14,015 17,334
Middle East and North Africa 2,343 3,895 5,282 7,281 9,434 11,589
Sub-Saharan Africa 1,092 1,762 2,422 3,527 4,936 6,458
Total Global 205,448 273,282 336,483 402,153 468,465 523,105
e/f = estimate/forecast. Source: Fitch Solutions
At stake is the power to influence a remarkable period of digital transformation, with many countries turning to new technology to
drive and sustain long-term economic growth projects over the next 10-to-20 years. At the heart of this will be all of the key
industries that we track on an ongoing basis; from Agribusiness to Financial Services, from Mining to Pharmaceutical research and
development, remote computing will become an essential workflow tool, accelerating processes, reducing costs and empowering
critical thinking.
Service industries are leading the way, using large pools of data to better serve customers and improve their own workflows through
an increasingly interconnected global network of data warehouses: ie, data centres. The remote data processing paradigm has
come to be known as cloud computing and the cloud business now demands the kind of scale and reach that only a few providers
can deploy most effectively.
The ongoing Covid-19 pandemic, which has touched almost every country in the world by late 2020, will add momentum to the
demand for cloud-based services and solutions. With critical business processes disrupted by office closures or the enforced
termination of skilled and unskilled workers, there is now a very clear case to be argued for automation, the use of AI to support
menial and specialised workflows and for remaining employees to remain connected by low-latency, real-time digital twins of legacy
work systems and environments.
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
fitchsolutions.com 5Cloud Computing Industry Trends & Regional Outlooks | 2021
Businesses will not be in a position to invest heavily in comprehensive cloud solutions in the near term: the focus will be on surviving
the current crisis and deploying available cashflows to support existing business models. However, once the crisis is either ended or
becomes more manageable, we expect businesses of all sizes to look to future-proof themselves against future extraordinary
events.
This will add to the momentum for digital transformation that had been building before the pandemic. The development of smart
cities, intelligent traffic systems (and the autonomous vehicles using them) and automation of thousands of different analogue
processes will depend on connectivity - 4G/5G wireless networks, fibre-optic backbones and low-power/wide area networking
systems being the most obvious - will themselves all depend on remote computing in various guises.
This special report, fully updated since its first edition published in April 2019, again draws on the expertise of our
Telecommunications and Information Technology analysts. We identify those countries or regions where sales of cloud computing
services, solutions and infrastructure are growing fastest and report on how and where service providers are positioning themselves
to exploit anticipated opportunities to grow their core businesses or expand into new fields. We also identify those markets that are
as yet under-appreciated and local operating conditions that could aid or hamper investment strategies.
Key Takeaways - Market Growth
• While it is, and will remain, the largest market for cloud computing services, the maturity of the North American market means
that it will grow at the slowest rate among the six regions we survey. Led by the US - home to the world's biggest cloud players -
the region will attain a total value of USD210.3bn by 2024.
• The US giants continue to push into international markets, conscious of reciprocal efforts being made by their growth-hungry
Chinese counterparts. Players such as Microsoft and IBM are moving quickly to augment their presence in Latin America, the
Page 2
Middle East and the more vibrant African economies, while Amazon Web Services is pushing into new markets and sectors
and is likely to become near-ubiquitous in the hybrid cloud computing market.
• China-based players will support Asia overtaking Europe to become the second most valuable cloud market by 2024, reaching a
value of USD149.8bn. Alibaba, Tencent, Baidu and others have been nurtured by China's economic boom over the last
decade and aim to help sustain that growth story through the development of cloud-based disruptive technologies feeding into
the financial, retail, entertainment, healthcare, transportation and security sectors across Asia and beyond.
• Sub-Saharan Africa will remain by far the smallest addressable market for cloud computing services, particularly while large
swathes of the region's infrastructure remains unsuitable for digital services and the industry's need for advanced connectivity
continues to be outweighed by more fundamental requirements, including the emergence of digital-first consumers. Sub-
Saharan Africa will see the fastest rate of growth over the next four years, of 267%, but as this is coming from a low base, it will
most likely lag behind all other regions for decades to come.
• Europe continues to be a highly regulated sector from a data security and privacy perspective. While robust data protection laws
have encouraged companies across all industries to invest in cloud-based services and solutions, compliance with regulations
also bears operational costs and can act as a disincentive to participation. We forecast the market to double in value to 2024,
reaching USD127.7bn, and bolstered by heavy investment in hyperscale data centres as well as high bandwidth last-mile
connectivity (eg, fibre and 5G).
• Latin America and the Middle East and North Africa will also grow at a rapid rate, albeit from a low base, and there are
plentiful investment opportunities for players willing to risk volatile political and macroeconomic environments and under-
developed regulations.
Key Takeaways - Industry Trends
• While clients' needs will continue to be varied across our forecast period to 2024, we believe that the need for scalability as well
as a need for flexibility and the ability to control how cloud services are deployed and used means that the industry will move
further towards the hybrid cloud delivery model.
• This will complicate matters for service providers, as they will need to ensure that, at one extreme, their platform elements will
THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data included in the report are solely
derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.
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