Japan’s Cloud Computing Services Market to Report Five-fold Growth by 2014

Cloud Computing Services Market to Report Five-fold Growth by 2014

Japan’s market for cloud computing services is developing rapidly adding 41.9 percent in a single year, reaching USD 540 million in 2010, a report by IDC Japan showed. Cloud computing services will continue to grow in Japan in the years to come, expanding to USD 1.8 billion in 2014, IDC analysts predicted.

Such a rapid development shows that the market for cloud computing services will grow five-fold in only five years, highlighting a trend analysts cannot ignore, and showing that regardless of cloud services market fragmentation companies are starting to realize the full potential cloud computing offers.

Japan’s vendors are looking at specialization as a way to gain competitive advantage, the report showed, for cloud computing is not a way to sell universal services anymore. Customers managed to realize that a new technology trend could be advantageous but solutions offered are not a panacea regarding specific company needs.  Hence, Japanese providers of cloud computing services started to offer tailor-made products aimed at exacting customers who are ready to accept that existing IT infrastructure and software deployment are insufficient to meet the requirements of a fast-developing enterprise. One of the characteristics of cloud services is self-service, facilitating the users’ access to the service and eliminating the need for complicated procedures, Satoshi Matsumoto, research manager, IT Services, IDC Japan, explained in a press release. Obviously, a growing number of cloud computing service providers are heading this way by offering custom-made solutions to cover market niches that were ignored by “traditional” software and hardware giants.

Bearing in mind that Japan is among the most technologically developed nations in today’s world, we can see a well pictured trend here: a growing market that is eager to reward new market players provided that they have something to offer to companies which are still unsure what technology is more advantageous.

A five-fold growth of Japan’s cloud computing services market in less than five years, as IDC analysts forecast, is an alarming signal. A market of USD 1.8 billion a year is not a market you would ignore in terms of market potential and strength. Additionally, Japan is well known for its ability to adopt new technologies in a very beneficial manner and it is hard to believe that Japanese entrepreneurs and home-grown companies will miss the chance to take advantage of a competitive technology.

Sure, North America tops the ladder of cloud computing service providers and you can bet that other countries will not compete with the United States on equal terms in the foreseeable future (the country still enjoys huge customer-driven capital inflows locally). However, like in any other market, the future is not always bright for those who deployed a technology first – Japanese companies proved they are extremely adaptable and the growing market for cloud computing services is just a sign something is changing in the way companies do business.

Ironically, the day the IDC report was published showed a continuing 3-months drop in stock prices of leading U.S.-based cloud computing mastodons like Amazon, Google, Microsoft, and Salesforce. Rackspace was an exception to the rule, with shares gaining in value, but trading signals are mixed, too. Stock market forecasting is a tricky one, though. However, fundamentals are rarely misleading and Japan’s cloud computing services market is showing great growth potential.

By Kiril Kirilov

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