Japan Cloud Computing Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Japan Cloud Computing Market Analysis

The Japan Cloud Computing Market size is estimated at USD 24.61 billion in 2024, and is expected to reach USD 53.15 billion by 2029, growing at a CAGR of 16.65% during the forecast period (2024-2029).

• The Japanese government's proactive promotion of digital transformation has significantly driven the market's growth, urging businesses to embrace cloud-based solutions. For example, in November 2023, Japan's cloud-native community marked a significant milestone with the launch of "Cloud Native Community Japan." This community became the official Japanese Chapter of the renowned Cloud Native Computing Foundation (CNCF). CNCF, known for leading pivotal open-source projects in the cloud-native domain and hosting global tech events like KubeCon + CloudNativeCon, is instrumental in driving cross-border innovation.
• Moreover, in a bid to propel shared quantum computing on a business-centric cloud platform, the Japanese government allocated a substantial USD 31.7 million (4.2 billion yen). This funding, sourced from the Ministry of Economy, Trade and Industry (METI), was set to benefit a quantum computing consortium led by the University of Tokyo over the next five years. As per Nikkei Asia, the university, leveraging an IBM quantum computer with the 27-qubit Falcon processor, planned to upgrade to a more advanced IBM model boasting 127 qubits this fall.
• In addition, major cloud providers joined forces with Japanese organizations to accelerate digital transformation and spur innovation. For instance, in April 2024, a pivotal collaboration saw the Japanese and US governments announce new academic AI partnerships. This initiative, backed by a hefty USD 110 million investment from Nvidia, Microsoft, and a consortium of Japanese companies, coincided with Japanese Prime Minister Fumio Kishida's official visit to the US. The partnerships strategically aligned the University of Washington with the University of Tsukuba and Carnegie Mellon University with Tokyo's prestigious Keio University. Notable contributors to this venture included industry giants like Nvidia, Amazon, Arm, Softbank, and Microsoft, alongside nine other undisclosed Japanese firms.
• Furthermore, Japan's vulnerability to natural disasters, such as earthquakes and typhoons, accentuated the importance of cloud solutions. These solutions offered a flexible approach to disaster recovery and ensured business continuity. Businesses minimized downtime and enhanced operational resilience by distributing data and applications across various centers. Recent events showcased Japanese companies leveraging cloud solutions to swiftly recover from natural disasters, highlighting the tangible benefits of cloud adoption.
• In January 2024, Amazon Web Services (AWS) rolled out an ambitious investment blueprint worth 2.26 trillion yen, earmarked for its cloud infrastructure in Tokyo and Osaka by 2027. This strategic move directly addressed Japan's surging demand for cloud services. According to insights from AWS's Economic Impact Study (EIS) for Japan, this investment was projected to contribute a whopping 5.57 trillion yen to the nation's GDP and support an average of 30,500 full-time equivalent (FTE) roles in local businesses each year. With a historical investment of 1.51 trillion yen spanning from 2011 to 2022, AWS's total commitment to Japan's cloud infrastructure was on track to near 3.77 trillion yen by 2027.
• In April 2024, Fujitsu Limited and Oracle joined forces to provide sovereign cloud and AI solutions, addressing the digital sovereignty needs of Japanese enterprises and the public sector. Leveraging Oracle Alloy, Fujitsu aimed to enhance its Hybrid IT services under Fujitsu Uvance, which focused on business growth and societal challenges. Notably, Fujitsu would have the autonomy to operate Oracle Alloy in its Japanese data centers, granting it greater operational control.
• However, while cloud computing offered on-demand platforms, software, and infrastructure, it remained susceptible to data breaches. Despite assurances of robust security measures, customers voiced concerns about entrusting their data to public cloud services. Even with diligent efforts from cloud service providers to safeguard client data, notable data breach incidents impacted some of the industry's most prominent players.

Japan Cloud Computing Market Trends

Major Advancements in Digital Change Nationwide

Japan Cloud Computing Industry Segmentation

Cloud computing delivers computing services via the internet, encompassing servers, storage, databases, networking, software, analytics, and intelligence. This approach fosters quicker innovation, adaptable resources, and economies of scale. Typically, customers pay solely for the cloud services they utilize, leading to reduced operational costs, more efficient infrastructure management, and the ability to scale in line with evolving business needs.

Japan cloud computing market report is segmented by type (public cloud [ IaaS, Paas, Saas], private cloud, hybrid cloud), by organization size (SMEs, large enterprises), and by end-user industries (manufacturing, education, retail, transportation, and logistics, healthcare, BFSI, telecom and IT, government and public sector, and others including utilities, media & entertainment, etc.). The market sizes and forecasts are provided in terms of value (USD) for all segments.