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The global cloud professional services market size is expected to grow at a Compound Annual Growth Rate (CAGR) of 17.2% during the forecast period, to reach USD 37.0 billion by 2026 from USD 14.2 billion in 2020. Major factors that are expected to drive the growth of the cloud professional services market include increasing offerings from cloud service providers, growing need of digitalization, adopting to the complex cloud environment, and the paradigm shift to the cloud because of COVID- 19 pandemic.

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COVID-19 Impact cloud professional services Market

The need to maintain employees' safety during COVID-19 has forced many corporations to change their regulations and policies. The foremost cause of the business disruption was the inability to move workforce and coordinate HR as earlier. The inability to travel and cross borders, and social distancing have forced businesses to change their current ways of functioning and reconsider operational choices. Governments are working closely with cloud providers to fight the COVID-19 pandemic; for instance, the White House has announced the launch of COVID-19 High-Performance Computing Consortium to provide worldwide COVID-19 researchers with access to the world's most powerful high-performance computing resources that can significantly advance the pace of scientific discovery to stop the virus

Cloud professional services Market Dynamics

Drivers: Increasing offerings from cloud providers

Rapid adoption of the cloud can also be attributed to the plethora of offerings offered by the cloud providers. CPS vendors are also increasing their offerings by implementing new technologies such as AI and ML with integration of cloud platforms hence creating an ecosystem for their clients. The benefits such as increasing efficiency, reduced cost, risk mitigation, and increasing competition are encouraging enterprises to opt for cloud professional services. Cloud services providers and CPS vendors are making strategic partnerships for making cloud adoption a seamless experience for their customers.

Restraints: Regulatory compliance issues

Companies that deliver services in cloud conduct businesses with a variety of industries, including financial services, public sector, healthcare, and telecommunications. Industry–specific regulations, and other requirements and standards are evolving. However, the evolving unfavorable industry–specific laws, regulations, interpretive positions, or standards could harm businesses. Compliance costs and other burdens imposed by industry–specific laws, regulations, and interpretive positions may limit customers’ use and the adoption of solutions and services, and reduce their overall demand. Compliance with these regulations may also require service providers to offer huge resources to support certain customers, which could increase costs and lengthen sales cycles. For example, financial service regulators have imposed guidelines for the use of cloud computing services that mandate specific regulations or require a regulatory approval by financial service enterprises before outsourcing certain functions. However, if organizations are unable to comply with guidelines or regulations, or end users are unable to obtain regulatory approvals to use services, the overall business may get hampered.

Challenges: Difficulty in implementing cloud services

With digital transformation, many enterprises are adopting the cloud for increasing efficiency, flexibility, scalability, and reducing costs and risk for their business processes. Organizations believe that the cloud is one of the most important factors to have a competitive edge. However, due to the complex nature of the cloud implementation, it is a challenge to implement the cloud for an organization.

Opportunities: Increasing awareness levels

The cloud based professional services are used to deploy high end cloud solutions in three major models: public cloud, private cloud and hybrid cloud. Globally, cloud professional services adoption rate is increasing in the APAC, LA and MEA region due to the increasing awareness amongst the SMBs as well as large enterprises catering to a broad gamut of verticals. This increasing awareness level is significantly pushing the enterprises to deploy comprehensive cloud solutions and hence utilize a variety of professional consulting, system integration, training and education and support and maintenance services provided by various vendors in the cloud professional services market.

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Based on service type, the consulting segment to hold during the forecast period

The cloud professional services vendors offer consulting services to users that have limited awareness related to the upgradation of current enterprise infrastructure. Users who wish to upgrade its infrastructure can harness the expertise of cloud professional service providers specializing in the deployment of cloud–based systems across industry–specific use cases, which helps in implementing the right mix of services. sImplementation services enable clients to quickly accomplish business goals for utilizing cloud strategy by planning, accessing current system, performing quality validation and verification, and offering support. Implementation services ensure a successful and secure deployment on any infrastructure, such as private cloud, public cloud, or hybrid cloud. The primary reason for the high demand for cloud migration services are scalability, flexibility for fluctuating workloads, improved productivity, agility, enhanced application security, and reduced costs.

Based on deployment model, the public cloud segment to hold larger market size during the forecast period

The services offered over the public deployment model are either free or offered under a subscription model. It helps organizations meet their demands for scalability, provides pay per usage pricing strategy, and ease of deployment. The public cloud is typically designed with built–in redundancies to prevent data loss. Private cloud deployment model enables a company to have better control over its data and reduce risks, such as data loss and issues related to regulatory compliance. The private cloud is used in banking and financial institutions, large enterprises, and government organizations, where only authorized users can access the system.

Asia Pacific (APAC) to grow at the highest CAGR during the forecast period

APAC is one of the fastest-growing regions in terms of technology adoption, and the demand for digitization is driven by various initiatives carried out by different governments and large enterprises in the region. Countries such as China, Japan, Australia, Singapore, India, and Indonesia are leading this technology adoption, which includes embracing new-age technologies such as AI, edge, IoT, analytics, and cloud. The rising adoption of cloud technologies act as a major factor driving the adoption of cloud professional services among enterprises in this region. The affordability and ease of deployment of cloud services would act as major factors for the adoption of cloud technologies among enterprises. Some of the major vendors operating in the region are Accenture, IBM, and Deloitte.

Key Market Players

The cloud professional services market is dominated by companies such Accenture (Ireland), IBM (US), Deloitte (UK), EY (UK), PwC (UK), HPE (US), Wipro (India), HCL (India), TCS (India), Capgemini (France), Atos (France), Cisco (US), Cognizant (India), DXC (US), Hitachi Vantara (US), Infosys (India), LTI (India), NTT Data (Japan), Rackspace (US), T-Systems (Germany), AWS (US), Google (US), Microsoft (US),  and others. These vendors have a large customer base and strong geographic footprint along with organized distribution channels, which helps them to increase revenues.

Scope of Report

This research report categorizes the cloud professional services market to forecast revenue and analyze trends in each of the following submarkets:

Based on the Service Type:

• Consulting
• Application Development and Modernization
• Implementation and Migration
• Integration and Optimization

Based on the Deployment Model:

• Public Cloud
• Private Cloud

Based on organization size:

• Small and Medium-sized Enterprises (SMEs)
• Large Enterprises

Based on verticals:

• BFSI
• Manufacturing
• Healthcare and Lifesciences
• IT and ITES
• Government
• Telecommunications
• Retail and Consumer Goods
• Energy and utilities
• Others

Based on regions:

• North America
  • US
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Rest of Western Europe
  • Central and Eastern Europe
• APAC
  • China
  • Japan
  • Rest of APAC
• MEA
  • Saudi Arabia
  • Rest of MEA
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America

Recent Developments

• In Feburary 2021, Accenture launched New Business Group with VMware to help organizations move to the cloud faster. The new business group aims to bring together dedicated professionals with deep expertise in hybrid cloud and cloud migrations, cloud-native and application modernization, and security across key industries.
• In February 2021, IBM, Siemens, and Red Hat launched a hybrid cloud initiative to increase the real time value of industrial IoT data.