The cloud migration services market was valued at USD 119.13 billion in 2019 and is expected to reach USD 448.34 billion by 2025, at a CAGR of 28.89% over the forecast period 2020 - 2025. Over the past decade, cloud computing adoption has been rise owing to increasing investments from small and medium enterprises. Globally, many organizations already switched to cloud platforms to take advantage of its benefits. In recent years, cloud adoption stands to be a significant consideration for IT cost reduction strategies. According to a study published by CenturyLink, a telecommunications company, the cloud computing technology is expected to generate USD 411 billion in revenue by 2020.

  • The significant reasons for migrating to the cloud are scalability, increased effectiveness, faster implementation, mobility, and disaster recovery. Considerable companies are offering cloud disaster recovery features to its customers, aiding them to expand their businesses. Cloud migration is gaining traction for its real-time experience, business elements, and accessibility to the on-premise data. This technology also aids in setting up several business units in minimal time.
  • The growth of cloud and industrialized services and the decline of traditional data center outsourcing (DCO) indicate a massive shift toward hybrid infrastructure services. While the conventional DCO market is shrinking, spending on colocation and hosting, along with infrastructure utility services, is increasing rapidly. This is expected to drive the shift toward cloud IaaS and hosting. Migration for PaaS, IaaS, and SaaS has been taking an at most importance in recent years. Additionally, companies are also embracing the DevOps capabilities and automation; hence, increasingly seen as critical to realizing the technical and business benefits of cloud adoption.
  • The migration on the hybrid cloud has experienced significant overall growth in the past few years compared to other cloud services. Using a hybrid cloud allows companies to scale computing resources and helps eliminate the need for massive capital to handle short-term spikes in demand. Many cloud providers offer the ability to rapidly increase infrastructure in various worldwide locations, enabling a business to expand to new territories quickly. According to the RightScale 2019 State of the Cloud Survey Report, 84% of enterprises have a multi-cloud strategy, and 58% of them with a hybrid approach, while organizations with a plan of multiple public clouds or multiple private clouds grew slightly.
  • However, the ongoing outbreak of COVID-19 across the world has created massive restrictions on businesses operating with on-premise IT systems. Hence, many of these organization has rapidly chosen to migrate to the cloud. Microsoft has mentioned that post-pandemic, the company has witnessed over 775% increase in demand for cloud services. A startup called Bunnyshell, which has raised USD 1 million in funding in 2018, has announced free cloud migration to the companies who suffered due to the COVID-19 pandemic. This is one of the robust marketing strategies adopted by the startups in the market to take advantage of the ongoing work-from-home mode of operations by several companies globally.

Key Market Trends

BFSI is Expected to Witness Significant Growth

  • Banking and Financial organizations are also accelerating the migration toward cloud solutions owing to the benefits such as flexibility, agility, and integration of emerging technologies and the FinTech ecosystems. Cloud solutions are helping banks to cut down expenses by slashing infrastructure costs significantly. Owing to this, many vendors are providing IaaS and PaaS applications to eliminate the need to manage to host, maintaining, updating, and scaling service operations targeted towards the BFSI sectors. Banks are widely recognizing that a cloud infrastructure can help them pursue sweeping modernization initiatives, including operational and customer-facing programs supported by AI, blockchain, and software containers.
  • Bank of America commented on how Microsoft was going to be the part of its strategy, to migrate 80% of its technology workloads to virtual platforms, furthering its push to be a digital leader in financial services. BoA announced to allocate more of its USD 3 billion annual computing infrastructure budget to the public cloud, following a rapid improvement in security technology. This is expected to impact the market’s growth significantly over the forecast period. Furthermore, HSBC noted their close partnership with Google to secure a safe route to the cloud that would ensure future seamless migrations. HSBC is aiming for the cloud-first approach to data analytics and machine learning (MI).
  • Banks that are tending to outperform their peers, in both revenue and operational efficiency, are 88 percent more likely to have incorporated hybrid cloud into their overall business strategy, according to a survey from the IBM Institute of Business Value (IBV). Banks are also finding hybrid clouds key to remaining competitive in the face of digitally-driven financial upstarts. In a separate IBV study, more than 60 percent of global banking executives surveyed see competition coming from new and unexpected places, and nearly 60 percent of them said the boundaries between traditional banks and new financial service providers are blurring.
  • In January 2020, Broadridge Financial Solutions announced an agreement with IBM to bring new cloud-based solutions to Broadridge’s clients in the financial services industry. Banco Sabadell, a large Spanish private banking group, also announced a 10-year services agreement that includes the strategic evolution of its business model with IBM public cloud capabilities. In parallel with that announcement, TSB, the British affiliate of Banco Sabadell said it would work with IBM to adopt a private and hybrid cloud strategy.

North America is Expected to Hold Major Share

  • In terms of adoption for cloud migration, North America is among the leading innovators and pioneers and holds the largest share in the market. The region also has a strong foothold of cloud migration vendors, which adds to its growth. Some companies include IBM Corporation, Microsoft Corporation, Amazon Web Services Inc., Cisco Systems Inc., Cognizant Technology Solutions Corporation, and Google Inc., among others.
  • According to the survey by IBM in 2019, 95% of the businesses in North America have migrated their critical applications and IT infrastructure to the cloud over the past year. Additionally, over 80% of firms in the region have mentioned seeking cloud migration for some of their applications next year. The advanced industrial landscape in the North Americ region has led to the widespread incorporation of AI on numerous operational levels, leading to a growing need for cloud migration. Additionally, BYOD has a substantial impact on the enterprises, as they realize the advantages of cost-saving, productivity, and flexibility.
  • OSRAM, a lighting manufacturer, has reportedly adopted cloud migration services for its new and legacy application to gain an agile IT infrastructure that could keep up with the competition. With this adoption, the company has mentioned achieving seven-digit annual savings, and several competitive new businesses win. According to the findings in the Global Cloud Index by Cisco, operators of hyperscale cloud data centers are increasingly dominating the cloud landscape. For instance, according to Credit Suisse, the share of hyper-scale data centers in the United States accounts for 47%, and Canada accounts for 4%.
  • The benefits offered with moving data, applications, among others to the cloud, are pushing many organizations in the region to adopt cloud migration services, thereby impacting the market’s growth positively. For instance, an Amazon web services cloud migration reduced hardware spend by 20%, for one of the top North American-based travel service providers, targeting the global market. Brooks Brothers, men’s clothier in the United States, witnessed a 50% increase in productivity by moving to a cloud-based. Clark Construction, a construction company in the United States, wanted to migrate its applications and data to the cloud. Using CloudEndure Migration, the company moved everything to AWS.

Competitive Landscape

The cloud migration market is competitive and is quite fragmented, which consists of several major players. In terms of market share, few of the major players currently dominate the market. These major players with prominent shares in the market are focusing on expanding their customer base across foreign countries. These companies are leveraging strategic collaborative initiatives to increase their market shares and profitability.

  • February 2020 - Amazon Web Services, Inc. announced that 3M Company is shifting its enterprise IT infrastructure to AWS. As part of its IT transformation initiative, 3M is migrating its enterprise resource planning (ERP) system, including accounting, supply chain management, manufacturing, product lifecycle management, and e-commerce business-critical enterprise IT applications, to the world’s leading cloud. 3M will upgrade its infrastructure and drive operational efficiencies across its global operations using AWS’sAWS’s proven global infrastructure and breadth and depth of services.
  • April 2020 - As businesses increasingly embrace a hybrid and multi-cloud strategy to gain agility, scalability, and flexibility, Cisco is integrating its SD-WAN Cloud Hub with Google Cloud to give enterprises full WAN application integration with cloud workloads. The partners claim their platform will enable businesses to optimize application stacks by distributing application components to their best locations.

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