The global telecommunications cloud market was worth $18.81 billion in 2023, but is set for significant growth in the next few years, achieving an estimated value of $139.31 billion by 2032, with North America set to hold the highest market share.
This positive trend, with a CAGR of 24.9% during the forecast period, is driven by the growing demand for innovative and scalable cloud solutions, capable of supporting the technological evolution of the telecommunications industry.
Cloud adoption enables operators to improve operational efficiency, reduce costs and offer advanced services to customers, thereby consolidating their competitiveness on the global marketplace.
These are the points noted in the “Telecom Cloud Market Size, Share & Industry Analysis” report, published by Fortune Business Insights.
Rise of cloud-native applications drives market growth
The rapid expansion of the telecommunications industry and the adoption of new technologies are increasing demand for cloud-native network functions.
Cloud-native solutions, supported by open-source software, offer reliable communications. Features such as delegated governance, system availability and immutability, independent lifecycle and others, are essential to provide successful cloud services.
Furthermore, the integration of 5G technology with cloud-native network functions has introduced revolutionary opportunities for the telecommunications industry.
Companies are investing significantly to fully understand these technologies and their applications in the industry, a trend that promises to further expand the cloud's market share in telecommunications.
The key role of 5G technology
The global deployment of 5G technology is experiencing exponential growth, with the potential to revolutionise the telecommunications industry.
According to a report by PWC and CTIA, US operators have invested up to USD 275 billion. The encouraging low-latency and high-speed capabilities of 5G are driving demand for cloud solutions, creating numerous opportunities for service providers and end users.
Furthermore, considering operational and customer needs, unified communication services and cloud computing are set to gain in efficiency with the adoption of 5G, benefiting from increased availability and advanced cloud communication capabilities.
In short, with the rise of 5G technology, the cloud market in telecommunications is set to grow further.
Limits to growth: data security risks
The expansion of the cloud in the telecommunications sector could increase cybersecurity risks, further complicating operations for providers and operators.
Cloud technology contains sensitive data that may be compromised by a single error within the security system. As a result, industries ought to adopt robust security solutions and address each alert with the utmost care. Risks, including insider threats, third-party risks and others, are increasing at a global level.
The increase in threats is bound to hamper market growth, requiring increased focus and more stringent security measures to protect data and ensure continuity of operations in the telecommunications sector.
Segmentation analysis of the cloud market in telecommunications
The telecommunications cloud market is segmented by:
- Deployment model, subdivided into:
- public: due to its scalability and flexibility, it holds the largest share and will drive demand;
- hybrid: will grow significantly, integrating public and private cloud capabilities, with 80 per cent of multi-cloud enterprises opting for hybrid infrastructures, as indicated by Flexera's 2022 report;
- private: will achieve a steady growth rate, due to greater assurance of data security.
- Company size, subdivided into:
- large companies: will dominate the market, driving investment in more data storage capacity and efficient mobile networks;
- small and medium-sized enterprises: will grow rapidly, attracted by new opportunities and the focus on unified communications and cloud technology.
- Type of function, subdivided into:
- virtual-network (VNF): will have the largest market share during the forecast period due to its ability to provide better communication;
- cloud-native (CNF): will grow rapidly due to their orchestration and scalability capabilities.
- Type of service, subdivided into:
- Software-as-a-Service (SaaS): will continue to dominate, facilitating digitisation with definable software services and reducing operational costs;
- Infrastructure-as-a-Service (IaaS): will show a rapid growth rate during the forecast period, as this technology can provide a flexible infrastructure at minimal cost;
- Platform-as-a-Service (PaaS): shows a steady growth rate, considering its real-time readiness.
Conclusions
In summary, the cloud market in telecommunications is poised for explosive growth, fuelled by the expansion of 5G technology, increasing adoption of cloud-native network functions and interest in hybrid and public solutions.
While large enterprises continue to dominate the sector with significant investments, small and medium-sized businesses are rapidly adopting cloud technologies to exploit new opportunities.
However, data security remains a critical concern, with companies called upon to implement robust solutions to protect their cloud infrastructures. Considering these dynamics, the cloud market in telecommunications is set to expand further, offering significant innovation and benefits for operators and end users.
