Market Overview

The Government Cloud Market was valued at USD 14.93 billion in 2019?and is expected to reach USD 41.86 billion by 2025, at a CAGR of 18.74% over the forecast period 2020?- 2025. The Pentagon alone is expected to spend USD 2 billion on cloud in the coming year.

  • Government data generation is on the rise due to growing census data (ever-increasing population), new policies/initiatives introduction, partnerships with other regions, and GDP increase due to new enterprises mushrooming up. Legacy systems consisting of physical hardware are not efficient and might run out of space. Hence government cloud is a mandatory
  • In 2009, the United States launched the portal. Since then there has been a rapid increase in the systematic opening of government data around the world. Cloud is responsible for transparency of government data, which promotes government’s accountability and reduces corruption. It also helps in empowering citizens and helps to solve complex public problems bringing a wider range of expertise and knowledge to bear on public problems.
  • Skills gap is the major challenge faced by cloud computing companies. As per IBM, shortage of skills in cloud technologies is one of their topmost prediction in 2018. OpRamp’s Cloud Skills Survey also says that most of the enterprises are planning to go for a hybrid model where they will shift certain specialized workloads to Managed Service Providers and also re-skill internal team.

Scope of the Report

Cloud for government becoming the next big thing as vendors are providing public, private or hybrid cloud solutions for govenment data related to its management, security, backup or compliance. The offerings can be categorized by delivery modes, such as Infrastrcuture as a service, Platform as a service or Software as a service.

Key Market Trends

Storage is the Most Widely Used Application

  • Downtimes due to hardware failures, software misconfigurations, security breaches and data loss impact the productivity of the government offices.
  • Cloud is a reliable option when it comes to storage of government data. That is because government budgets are limited and on-premise solutions are becoming costlier with increasing volume of data.
  • Central and state governments have large amounts of data in the form of user records, public policies and schemes. Thus it becomes critically important that the government has a strong and robust storage option so that it delivers all the services on demand.
  • Companies like Pure Storage offers all-inclusive software-based encryption, snaps, replication and cloning to ensure data integrity. That cloud database is then managed by Rubrik.

Asia-Pacific to Witness the Highest Growth

  • Asia-Pacific is in the middle of a transformation powered by cloud technologies.
  • The increasing proliferation of smartphones and tablets are causing major companies to establish their cloud data center in Asia-Pacific.
  • The governments in Australia and Singapore see cloud services as an opportunity to improve government service delivery outcomes by eliminating redundancy, increasing agility and providing information and communication technology (ICT) services at a cheaper cost.
  • Moreover, the Government of India has implemented a number of ICT initiatives under the National e-Governance Plan (NeGP), including the creation of ICT infrastructure both at the centre and state levels. The infrastructure thus created is providing the basis for the adoption of cloud computing for the government with the objective of making optimum use of existing infrastructure, re-use of applications, efficient service delivery to the citizens and increasing the number of e-transactions in the country, thus helping achieve the ultimate goal of NeGP.

Competitive Landscape

The market for government cloud is concentrated with major giants such as Microsoft, Oracle NEC, IBM and Google providing cloud solutions and services for the government. The entry barrier is high for this market since the existing vendors have a strong foothold in the market.

  • April 2019 - Amazon and Microsoft are competing for a USD10 billion military cloud contract called JEDI (Joint Enterprise Defense Infrastructure). JEDI is designed to upgrade legacy systems with newer cloud services. According to the original proposal, JEDI Cloud will provide enterprise-level, commercial IaaS and PaaS to the Department and any mission partners for all Department business and mission operations."
  • November 2018 - Amazon Web Services opened a new region of interconnected data centers specifically for the U.S. government and its various contractors. The new government cloud region comes seven years after Amazon’s first West Coast government cloud region debuted in 2011.

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