Distributed Cloud Market

Distributed Cloud: The Future of Cloud Computing

Cloud computing has revolutionized the way businesses manage their IT infrastructure. However, as the demand for cloud services continues to grow, so do the challenges of managing them. One emerging solution is the distributed cloud, which promises to solve many of the issues associated with traditional cloud computing.

Distributed cloud is a model in which cloud services are decentralized and distributed across multiple locations. This model allows for cloud services to be provided from a variety of locations, including public clouds, private clouds, and edge devices. Distributed cloud technology enables businesses to leverage the benefits of cloud computing while also maintaining control over their data and applications.

One of the primary benefits of distributed cloud is its ability to provide low-latency access to cloud services. With traditional cloud computing, data must be transmitted from the user's device to a central data center, which can result in slow response times. However, with distributed cloud, data can be processed locally, reducing latency and improving the user experience.

Another benefit of distributed cloud is its ability to provide greater resilience and reliability. Traditional cloud computing relies on a centralized data center, which can be vulnerable to outages and other disruptions. With distributed cloud, cloud services are spread across multiple locations, reducing the risk of downtime and improving overall system reliability.

In addition, distributed cloud offers greater security and compliance. By decentralizing cloud services, businesses can better control access to their data and applications. This is particularly important for businesses in regulated industries, such as healthcare and finance, which must comply with strict data privacy and security regulations.

Distributed cloud also has the potential to improve scalability and cost efficiency. With traditional cloud computing, businesses must often provision more resources than they need in order to accommodate spikes in demand. However, with distributed cloud, businesses can scale resources up or down as needed, reducing costs and improving efficiency.

Dynamics of Distributed Cloud Market

Drivers in Distributed Cloud Market

The market for distributed cloud computing solutions is growing due to the increasing focus on improving user experiences. These solutions allow businesses to process data in real time, leading to more accurate and relevant data that can be used to create long-term customer relationships. The rise in mobile technology, the need for minimum data recovery, and the surge in digitization are also driving the market's growth. Additionally, the ability of public cloud services to transition to better distributed cloud computing with high security is contributing to the growth of the distributed cloud market.

Restraints in Distributed Cloud Market

However, the complexity of implementing distributed cloud architecture globally is a major restraint for the market's expansion. The unique architecture of each cloud service provider and specific requirements for private cloud deployments and edge computing architectures make the design and implementation of distributed cloud architecture challenging for IT organizations. To overcome this challenge, IT organizations must combine the capabilities of IaaS to supply security, visibility, and control of dedicated network support and security. Despite this restraint, the adoption of cloud technology, launch of new products, and increase in government involvement in the implementation and promotion of cloud technology are expected to boost the market growth.

Opportunities in Distributed Cloud Market

The growth of distributed cloud architecture is expected to be driven by the development of 5G network technology. Distributed cloud infrastructure combines edge computing and cloud computing models, where edge locations act as a network between physical locations, data centers, remote locations, and on-premises. The increase in distributed cloud sites will require mini data centers owned by service providers and organizations, which will require strong and cost-effective network connectivity. This connectivity can be managed and provided by the 5G network, which can offer network slicing. Software can also play a vital role in advancing the 5G network and delivering new network solutions to offer speed and security while reducing cost. Major tech companies like Microsoft and Google are already making significant investments in distributed cloud architecture to extend their infrastructure and offer innovative solutions. The adoption of the Internet of Things (IoT) is expected to further drive the growth of distributed cloud architecture. Digitization is also a significant contributor to the growth of the market. It involves the conversion of data into a digital format and is vital in improving customer service and security. Companies are increasingly adopting software-as-a-service (SaaS) solutions to offer digital services to their customers, which saves time on business operations and drives market growth. Moreover, the adoption of advanced technologies like blockchain, big data, and artificial intelligence is further driving the growth of the market.

Challenges in Distributed Cloud Market

Operating in a cloud environment poses the challenge of performance fluctuations due to the sharing of resources among multiple applications running on a single server. Additionally, cloud service providers may limit bandwidth, causing further performance issues. This can lead to costly additional charges if a company exceeds its quota. The outbreak of the COVID-19 pandemic has accelerated the demand for distributed cloud services in verticals such as BFSI, manufacturing, and remote work, as well as entertainment platforms like video streaming. IT leaders recognize the importance of a consistent operational experience between the edge and public and private clouds, but face obstacles in establishing secure and reliable connections between providers, navigating different support and consulting processes, and working with various platform services. Distributed cloud systems can address these challenges, making them an attractive solution for organizations. Therefore, the COVID-19 pandemic has presented significant opportunities for the distributed cloud system market to grow.

Ecosystem of Distributed Cloud Market

The Distributed Cloud market is anticipated to experience significant growth during the forecast period due to various factors. Data security is expected to be the second-largest contributor to market growth based on service type. In order to improve visibility across distributed cloud environments, it is essential to map out each component's dependency on the distributed cloud. As cloud computing is highly scalable, it is necessary to scale applications while considering the security implications. By using distributed cloud architecture, confidential data resources and processes can remain in the organization's private cloud or data center that is integrated with the public cloud, which ensures the security of confidential information.

Furthermore, large enterprises are expected to be a significant contributor to the Distributed Cloud market growth during the forecast period based on organization size. Large enterprises aim to gain market presence by adopting the latest technology to stay ahead of the competition. The adoption of distributed cloud technology among large enterprises is likely to be higher as compared to SMEs. Large organizations have customers located in various geographical locations and therefore, focus on serving customers in each location to improve customer experiences and build strong relationships. To accommodate a large number of customers and data, these organizations are now making a strategic shift to the latest technologies to become cloud-driven companies. Therefore, large organizations have accelerated cloud adoption with the advent of the distributed cloud.

Edge computing is the practice of processing data close to the source of its origin, rather than sending it to a centralized location. This reduces the time it takes to process data and improves the overall performance of distributed cloud systems.

Another significant development in the Distributed Cloud Market is the increasing demand for hybrid cloud solutions. Hybrid cloud solutions combine public cloud services with private cloud infrastructure, allowing organizations to customize their cloud environments to their specific needs. Hybrid cloud solutions are becoming more popular because they offer greater flexibility, security, and cost-efficiency compared to traditional cloud solutions.

Moreover, the COVID-19 pandemic has also had an impact on the Distributed Cloud Market. With remote work becoming the norm, there has been a surge in demand for cloud-based collaboration tools and remote access solutions. This has driven the adoption of distributed cloud systems, as they enable organizations to provide seamless and secure remote access to their employees.

During the forecast period, the retail and consumer goods vertical is expected to experience a higher Compound Annual Growth Rate (CAGR). This is attributed to the growing purchasing power of customers and the increasing demand for mobility solutions in this sector. The retail and consumer goods vertical handles a significant amount of customer data, which is used to improve customer behavior and maintain a good relationship. During festive seasons, the retailers face challenges with data handling and can address this by shifting their non-critical workloads to the public cloud while creating additional infrastructure. This move is likely to support the adoption of hybrid cloud solutions, which enable the utilization of distributed cloud technology in this sector.

The Asia Pacific market is anticipated to grow at the highest CAGR during the forecast period. The region comprises countries with a complex ecosystem of startups, governments, SMEs, and large multinational companies that provide valuable Information and Communications Technology (ICT) solutions. The region has been experiencing rapid advancements in cloud computing, IoT, and telecommunications, leading to the adoption of cloud-based strategies by several organizations. The rising levels of urbanization, government support for the digital economy, and technological innovation are also driving the technological advancements in the region. Although North America currently dominates the distributed cloud industry, the Asia Pacific region is expected to witness the highest growth rate during the forecast period. This is attributed to the adoption of distributed cloud by numerous Small and Medium-sized Enterprises (SMEs) for cost-effectiveness and the expansion of digital infrastructure in developing countries such as India and Singapore in the region.

During the forecast period, the edge computing segment has emerged as the dominant contributor to the growth of the distributed cloud market. It is projected to continue its leadership in the coming years due to the increasing number of intelligent applications adopting distributed cloud. On the other hand, the intelligent transportation segment is expected to witness the highest CAGR in the forecast period. This growth can be attributed to the adoption of distributed cloud to gain faster data insights and integrate automation technologies to enhance the customer experience.

Dominating Companies in Distributed Cloud Market

• ALIBABA CLOUD
• AMAZON WEB SERVICES
• COMMVAULT
• F5
• GOOGLE
• IBM
• MICROSOFT
• TERADATA
• VMWARE
• ORACLE
• WIND RIVER SYSTEMS
• SCC
• COHESITY
• CUBBIT
• PHOENIXNAP
• PLURIBUS NETWORKS
• ANYSCALE
• PANZURA
• PLATFORM9
• ZEDEDA
• HAZELCAST
• Axway
• CloudSigma AG
• Databricks
• DigitalOcean
• Liquid Web, LLC
• MassiveGRID Inc.
• Rackspace Technology
• Salesforces Inc.
• SAP SE
• Verizon

Recent Developments in Distributed Cloud Market

• In November 2020, IBM acquired Instana, a leading provider of application performance monitoring (APM) solutions for hybrid cloud and microservices. The acquisition strengthens IBM's position in the APM market, allowing IBM to provide a comprehensive set of APM tools for developers and IT teams.
• In December 2020, Hewlett Packard Enterprise (HPE) announced its acquisition of Silver Peak, a leading provider of SD-WAN (software-defined wide area network) solutions. The acquisition enhances HPE's edge-to-cloud portfolio and strengthens its position in the rapidly growing SD-WAN market.
• In June 2021, Equinix, a leading provider of colocation data center services, announced a strategic partnership with Google Cloud. The partnership enables Equinix customers to access Google Cloud services via Equinix's global network of data centers, providing greater choice and flexibility for enterprises seeking to leverage the cloud.
• In October 2021, VMware announced its acquisition of SaltStack, a provider of intelligent automation for IT operations (AIOps) and security operations (SecOps) in the cloud and data center. The acquisition strengthens VMware's position in the AIOps and SecOps markets and enhances its ability to provide comprehensive cloud management and security solutions.
• In December 2021, Red Hat announced its acquisition of StackRox, a provider of Kubernetes-native security solutions for containerized applications. The acquisition enhances Red Hat's OpenShift platform and strengthens its position in the rapidly growing Kubernetes and container security market.
• In March 2022, IBM announced its acquisition of Turbonomic, a leader in Application Resource Management (ARM) and Network Performance Management (NPM) software. The acquisition is expected to help IBM strengthen its AI-powered automation capabilities, including for distributed cloud environments.
• In December 2021, Microsoft announced its acquisition of CloudKnox Security, a provider of cloud infrastructure entitlement management solutions. The acquisition is expected to help Microsoft bolster its distributed cloud security offerings.
• In September 2021, VMware announced its acquisition of SaltStack, a leader in infrastructure automation and configuration management software. The acquisition is expected to help VMware enhance its distributed cloud automation capabilities.
• In May 2021, Hewlett Packard Enterprise (HPE) announced its acquisition of Determined AI, a provider of machine learning platform solutions. The acquisition is expected to help HPE expand its AI and machine learning offerings for distributed cloud environments.
• In January 2021, Cisco announced its acquisition of Acacia Communications, a provider of high-speed coherent optical interconnect technologies. The acquisition is expected to help Cisco expand its distributed cloud networking capabilities.

Overall, distributed cloud is a promising technology that has the potential to revolutionize cloud computing. As businesses continue to demand faster, more reliable, and more secure cloud services, distributed cloud is poised to become an increasingly important part of the cloud computing landscape.