Government Cloud Market To Prosper in Coming Years

[Business Point 2021]

In recent years, the adoption of cloud by government agencies across the world has increased massively and this trend is predicted to continue in the coming years as well owing to the rising internet penetration, rapid digitization of business operations, and mushrooming popularity of cloud computing. The adoption of cloud is helping government agencies reduce capital expenditure (CAPEX) and the total cost of ownership (TCO), without undercutting important public services. In addition, the demand for labor optimization, facility consolidation, asset utilization, and measured services is fueling the adoption of cloud by government agencies around the world.

Besides, the burgeoning need for sophisticated network solutions is also fueling the expansion of the global government cloud market. According to the estimates of the market research company, P&S Intelligence, the value of the market will grow from $20.8 billion in 2017 to $49.2 billion by 2023. Furthermore, the market is expected to exhibit a CAGR of 15.4% from 2018 to 2023. With rapid technological advancements, many government information and communications technology (ICT) executives are increasingly seeking sophisticated and agile network solutions, which would assist them in efficiently reacting to various public concerns.

These executives are leveraging government cloud for adapting to the changing technology landscape with minimal expense and hassles. Further, government agencies are adopting cloud to improve their adaptability and agility and also to enhance flexibility and ensure faster deployment of services. Platform as a service (PaaS), infrastructure as a service (IaaS), and software as a service (SaaS) are the most widely used types of cloud models by governments across the world.

Out of these, the demand for SaaS models was observed to be the highest during the last few years. This was because of the high requirement for SaaS among government agencies, on account of the low cost and pay-as-you-go capability of the solution. Furthermore, many government agencies are using the SaaS model for renting software applications from cloud service providers (CSP), who remotely host these services. Geographically, Asia-Pacific (APAC) is predicted to be the fastest-growing region in the government cloud market in the coming years.

This is credited to the growing government focus on advancements in citizen services and soaring investments being made in the information and communication technology (ICT) departments in government set-ups and the launch of promotional campaigns in the region. In addition, the growing need for implementing cloud-based security services for efficient decision making and accessibility is also propelling the demand for cloud among government agencies in the region.

The industry is currently witnessing the trend of rapid advancements in the technology. E-government initiatives are further boosting the use of cloud computing. This is assisting governments in advancing their business flexibility and improving the penetration of their services. Departments in the education, insurance, and defense sectors have been the early adopters of cloud computing in the public sector, while others are following their lead, thereby accelerating the progress of the industry.

Hence, it can be safely said that the use of cloud solutions by government agencies will surge sharply in the coming years, mainly because of the rapid digitization of operations and increasing internet penetration across the world.