Key Takeaways
- North America dominates the cloud Backup market owing to rising number of data centers and cloud based applications in 2019.
- The rising penetration of IoT based devices in manufacturing industries, large volume of data generation in telecom sector are creating new opportunity for cloud Backup market.
- Hybrid cloud storage and Backup is expected to accelerate the cloud Backup market due to rise in cross border transaction.
- Data compliance issue due to lack of standardized regulation is likely to hinder the growth of cloud Backup industry.
End User Type - Segment Analysis
Manufacturing and telecom sector are expected to provide fast pace growth to cloud Backup market at a CAGR of 22.45% during 2020-2025. Rising adoption of IoT based equipment in industrial application are continuously increasing the data consumption in manufacturing industries. The Industrial IoT market is expected to reach $100 billion by 2025 growing at CAGR of 18.56% during 2020-2025. Hence, most of the data centers are built on providing support to industrial data management. While industrial manufacturing sector are presently struggling to reduce operational cost, the cloud based Backup can be considered as the most cost effective solution for the data management applications. Telecom sector is also expected to provide large growth opportunity for cloud back market due to deployment of 5G technology worldwide. 5G services are expected to be commercialized on a large scale post 2020. Approximately, 50%-55% of the investments driven by 5G technology is likely to be directed towards datacenters by 2021. The implementation of 5G technology is likely to create huge data consumption, which will impact the cloud Backup market positively.
Deployment Type - Segment Analysis
Hybrid cloud is likely to witness highest CAGR of approximately 22.87% during 2020-2025. Hybrid cloud is gaining more popularity in recent time due to benefit of creating more varied cloud environment. Hybrid cloud provides the benefit of both private and public cloud resources. With the growing cross border transaction, most of the businesses are looking for varied cloud environment. With the use of hybrid cloud technology, businesses are now managing public cloud for the bulk of their computer data storage with scalability, affordability, and reliability, while creating a smaller private cloud for their critical and sensitive data.
Geography - Segment Analysis
In 2018, North America dominated the cloud Backup market with a market share of more than 34.69%, followed by APAC and Europe. The region of North America accounts for majority of the cloud traffic across the globe. According to the Cisco Global Cloud Index, the cloud traffic in the region is poised to grow at a CAGR of 24% during 2016-2021 and will account for nearly 40% of the global traffic by 2020. This will also impact the growth of the hyper scale datacenters positively in the region, thereby boosting the demand for cloud Backup market. Additionally, the existing datacenter facilities in North America are also witnessing expansions, which will prominently increase the usage of cloud Backup. In the latest of developments, Cyxtera in March 2019, announced the expansion of its datacenters in Phoenix, Silicon Valley, New York, Metro Atlanta, and Toronto, which are part of the ten biggest datacenters in North America. Similarly, Data center colocation is also on the rise in the U.S. with the burgeoning office space costs and the increasing costs to maintain datacenter infrastructure. As cloud back is mostly preferred by most of the data centers in North America, the region is likely to witness a significant pace of growth in cloud Backup market.
Drivers – Cloud Backup Market
- Trending machine virtualization technology
Machine virtualization is a trending technology widely adopted by data centers. It enables data center to use compute resources efficiently as compared to non-virtualized environments. The increasing usage of virtualization techniques in data centers is helping businesses in reducing their capital expenditure and optimizing the hardware by using minimum number of physical servers. A machine virtualization concept have the ability to reduce the cost of a data center by approximately 30%. Hence, most of the data centers are increasingly adopting this technology. Virtualization market is likely to reach $10 billion by 2025, growing at CAGR of 8.78%. In recent time, many of the vendors can sense the growing opportunity arising due to adoption of machine virtualization in data center applications. And hence, they have started developing cloud backup solution specific to machine virtualization.
- Rising adoption of cloud computing in businesses
Since 2016, most of the industries and enterprises are preferring to replace physical server with cloud based server. The adoption of cloud computing enable enterprises to scale up and scale down their businesses more conveniently. Cloud based computing offer new business capabilities and opportunities for the businesses. Apple is spending more than $306 million on Amazon’s cloud every year. Similarly, in 2018 Amazon generated a revenue of approximately $25 billion from its AWS cloud computing services. With the growing demand for cloud based computing, cloud back is finding more applications. It is always convenient and cost effective for companies to use cloud based Backup for any cloud server.
Challenges – Cloud Backup Market
- Data Compliance issue
Cloud Backup faces many regulatory challenges due to storage of data in multiple countries/region. There are no clear rules defined for the data management and security that have been managed in cloud by different countries/ region. For instance, HIPPA regulation is followed in United States while European Union follow Data Protection Directives for any data compliance. With the introduction of cloud Backup, there are possibilities when a data of a company in one country may be managed by a cloud based company in another country. Such data faces several data compliance issue due to availability of two different regulations set by individual countries. This may likely to compromise the data security.
Market Landscape
Cloud Backup top 10 companies include Acronis International, Asigra, Barracuda Networks, Carbonite, Code42 Software, Datto, Druva Software, IBM, Iron Mountain Incorporated, Microsoft, Oracle, and Veeam Software. In 2018, Cloud Backup market share of top 5 players was estimated to be approximately 37.48% in 2018. Acquisition, partnership, and Service differentiation are the key strategies adopted by most of the companies and storage service providers in this market.
Acquisitions/Technology Launches
- In 2019, Amazon Web Services (AWS) CloudEndure, cloud backup and disaster recovery (BDR) startup.
- In 2019, Carbonite, a cloud backup and Recovery Company announced to acquire Webroot, an endpoint security vendor. The company expect to provide a complete solution to its client by offering its cloud backup service with Webroot’s endpoint security tools.
