India's public cloud market could reach $8 billion by 2023

16 December 2019 Consultancy.in

India’s public cloud market is among the largest in the Asia Pacific (APAC) region behind only Australia and Japan, according to new analysis from Boston Consulting Group (BCG). By 2023, the consulting firm expects the public cloud market in India to reach the $8 billion mark. 

Experts have been tracking the cloud market in India for a number of years now, with the country emerging as a hub for cloud-based working thanks to its digital infrastructure. In 2015, research firm Gartner predicted that India’s public cloud market would reach a value of $1.9 billion by 2019, however, the market has exceeded expectations by some distance.

According to BCG, the public cloud market in India was worth $2.6 billion last year already and is only likely to grow further. BCG analysed the public cloud market in India as part of broader regional analysis of the segment across the vibrant APAC region in general, with a focus on the largest markets.

Cloud market overview India

Six economic centres in the region – Australia, Japan, India, Indonesia, South Korea and Singapore – were part of BCG’s analysis, which revealed that the cloud market is expected to grow across the board. In terms of size, Japan and Australia emerged atop the list ahead of India, with public cloud markets worth $8 billion and $5 billion respectively. 

In terms of growth, however, India and Indonesia are the strongest performing markets in the region. Between 2016 and 2018, the average compound annual growth rate (CAGR) in the public cloud market across all six APAC countries stood at 25%. India and Indonesia recorded outflanked the rest, booking a staggering 30% growth rate.

A similar story is set to unfold over the next five years, according to BCG. India and Indonesia are both set to grow at a CAGR of 25% leading up to 2023, which is higher than the growth rate of the other countries. The consulting firm reports that India is on its way to becoming a global leader in the cloud domain.

Economic impact of the public cloud

The reason behind this position of global dominance is the size of the population and consequently the cloud market in India, which gives it’s the edge over other digitalising markets. Previous analysis from BCG has predicted that the country will have as many as 850 million online users by 2025.

The possibilities in such a market are monumental, particularly in the public cloud sphere, as demonstrated through an example cited by BCG. The firm reveals that in May this year, as many as 18.6 million people were simultaneously viewing a cricket match on an online videa streaming platform Hotstar, which was “the global record for viewership of a live program on streaming media.”

The firm continued to highlight the role that the public cloud plays in the backdrop, because “that kind of surge in viewership can be accommodated reliably only with the public cloud’s scalable architecture.” This scale of growth is likely to manifest itself significantly in the rapidly growing Indian economy.

Economic impact scenarios

By 2023, BCG predicts that the public cloud market could have contributed as much as $102 billion to the Indian economy in direct and indirect value. Growth in the market is also likely to create employment, enumerated by BCG at approximately 980,000 jobs over the same period. 

Nevertheless, these remain best case scenarios, and are subject to slowing in light of a number of challenges that the cloud market continues to face. At the moment, many in India are still feeling their way around data privacy boundaries, and there is a lack of clarity about the expectations from the cloud domain. India also currently lacks the requisite digital infrastructure to achieve the desired scale, while many remain weary of the high costs involved, particularly with legacy migration.


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