Japan Cloud Computing Market Size
Study Period | 2019 - 2029 |
Base Year For Estimation | 2023 |
Market Size (2024) | USD 24.61 Billion |
Market Size (2029) | USD 53.15 Billion |
CAGR (2024 - 2029) | 16.65 % |
Market Concentration | Medium |
Major Players*Disclaimer: Major Players sorted in no particular order |
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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
- Cloud computing fostered innovation by providing access to advanced technologies, such as artificial intelligence (AI), machine learning (ML), and big data analytics. Organizations experimented and innovated without significant upfront investments. For example, in August 2023, a survey by Japan's Ministry of Internal Affairs and Communications revealed that nearly 69% of Japanese companies utilized cloud services primarily for file storage and data sharing. In addition, the survey indicated that over half of these companies leveraged cloud services for internal information sharing and email communications.
- In addition, in March 2024, Digital Realty, a provider of cloud and carrier-neutral data centers, announced the initiation of construction on its third data center on the NRT campus in Inzai, Chiba Prefecture, Japan. Dubbed NRT14, this center was a pivotal addition to Digital Realty's global data center platform, PlatformDIGITAL®, which was planned to open in December 2025. Its launch aimed to significantly bolster the availability of advanced, AI-ready infrastructure in Japan.
- Moreover, retailers leveraged AI for enhanced customer insights, supply chain optimization, and dynamic pricing strategies. E-commerce platforms use AI to provide personalized shopping experiences and improve customer retention.
- Furthermore, as organizations digitized their operations, ensuring data security and regulatory compliance became a priority. Many cloud providers offer robust security measures and compliance with regulations, making them attractive to organizations handling sensitive data. For example, in March 2024, Cisco Systems, Mitsui Information, and KDDI Engineering announced a collaboration to roll out a private 5G network tailored for smart factories. The trio planned to establish an "Industry 4.0 Testbed" at the Shinwa Komaki SFiC Lab in Komaki City, Aichi Prefecture, Japan. This initiative aimed to provide manufacturers with a platform to test and validate various industrial applications leveraging private 5G technology. Envisioned applications spanned from automated guided vehicles (AGVs) to industrial robots, machine vision systems, and other facets of advanced factory automation.
- In addition, cloud computing enhanced digital transformation by evolving it from merely adopting new technology to a comprehensive restructuring of processes, tools, and experiences in a remote, virtual environment. Cloud solutions improve security, enhance user experience, and protect data integrity. Consequently, businesses increasingly incorporated cloud technologies into their operations, driving the growth of the cloud computing market.
- Furthermore, cloud computing emerged as a transformative force for businesses aiming to develop supply chain management (SCM) swiftly and effectively. For instance, in March 2024, Oracle unveiled Oracle Smart Operations, introducing enhanced supply chain execution features in its Oracle Fusion Cloud Supply Chain & Manufacturing (SCM) suite. Leveraging technologies such as artificial intelligence (AI), these new features in Oracle Fusion Cloud Manufacturing and Oracle Fusion Cloud Maintenance empowered customers to boost factory output through increased productivity, improved quality, reduced unplanned downtime, and enhanced operational visibility.
- In parallel, numerous banking and fintech entities steadily transitioned to cloud technology since its inception. The financial sector experienced rapid growth in data creation and utilization. This transition enhanced transparency and gave consumers greater control over auditing processes and data management. In addition, it offered a more flexible method for data classification.
Telecom is Expected to Grow at a Significant Rate
- The rollout of 5G networks in Japan is driving a surge in demand for cloud-based solutions. 5G networks require significant computational resources to handle the increased data traffic and support new applications. For instance, as of March 2024, Japan recorded nearly 92.4 million 5G subscriptions, as the Ministry of Internal Affairs and Communications reported. The surge in 5G adoption drives the nation's demand for cloud computing services, fueled by the scalability and flexibility that cloud computing offers.
- Cloud-based tools can help telecommunications companies optimize their network infrastructure, improve performance, and reduce costs. By leveraging cloud technologies, telecom operators can automate network management tasks, analyze network data, and identify potential issues more efficiently.
- Cloud computing enables telecommunications companies to deliver enhanced customer experiences. For example, cloud-based platforms can be used to personalize services, offer real-time customer support, and analyze customer behavior to identify trends and preferences. For instance, in June 2024, Japanese companies KDDI and Sharp teamed up with Super Micro Computer Inc. and Datasection to establish an AI data center. The facility, set to be operational soon, boasts Nvidia's GB200 NVL72s server racks, specifically designed for training and executing AI models. With a capacity to accommodate at least 1,000 servers, the data center is poised to play a pivotal role in the AI landscape.
- The growing adoption of IoT devices and the rise of edge computing are creating new opportunities for telecommunications companies to leverage cloud-based solutions. For instance, In August 2023, a survey conducted by Internet Initiative Japan found that 18.5% of Japanese manufacturing firms were adopting the Internet of Things (IoT) to create smart factories. Including those already using IoT or considering its adoption, the figure climbed to 37.9%. Given that cloud platforms can manage IoT devices, process data at the edge, and offer cloud-based services to IoT applications, demand for these platforms is expected to rise.
- As the telecommunications industry becomes increasingly competitive, companies are looking for ways to differentiate themselves and improve their bottom line. Cloud computing can help telecom operators achieve these goals by enabling them to offer innovative services, reduce costs, and improve operational efficiency.
Japan Cloud Computing Industry Overview
Japan's cloud computing market experienced notable fragmentation, with numerous players competing for market share. Moreover, many of these companies formed strategic partnerships and expanded into new markets to strengthen their positions. Furthermore, key players included industry leaders such as Amazon Web Services, Google LLC, Microsoft Corporation, and Salesforce.
Japan Cloud Computing Market Leaders
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Microsoft Corporation
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Amazon Web Services, Inc
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Google LLC
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Oracle Corporation
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IBM Corporation
*Disclaimer: Major Players sorted in no particular order
Japan Cloud Computing Market News
- April 2024: Microsoft announced plans to invest USD2.9 billion over the next two years, bolstering its hyperscale cloud computing and AI infrastructure in Japan. The tech giant aimed to enhance its digital skilling initiatives, targeting AI training for over 3 million individuals in the next three years. In addition, Microsoft planned to inaugurate its inaugural Microsoft Research Asia lab in Japan and intensify its cybersecurity partnership with the Japanese government.
- April 2024: Oracle Corporation Japan announced a bold investment exceeding USD 8 billion, spread over the next decade, in response to Japan's burgeoning appetite for cloud computing and AI infrastructure. This financial commitment was poised to expand the footprint of Oracle Cloud Infrastructure (OCI) across Japan. In addition, Oracle enhanced its operations and support engineering teams with local personnel to guide clients and partners through Japan's digital sovereignty mandates.
Japan Cloud Computing Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Robust Shift Towards Digital Transformation Across the Country
5.1.2 Data Privacy Concerns Are Driving Increased Adoption Of Public Cloud Services
5.2 Market Challenges
5.2.1 Regulatory Compliance and Data Breaching Risk
5.3 Pricing Model Analysis
5.4 Overview of demand trends of Cloud Computing in Japan
5.4.1 Increased adoption of hybrid and multi-cloud strategies
5.4.2 Rising adoption if SaaS Applications
5.5 Number of data centres in Japan
5.6 Industry Regulations and Standards for Cloud Computing Market in Japan
5.7 Case Study Analysis
6. MARKET SEGMENTATION
6.1 By Type
6.1.1 Public Cloud
6.1.1.1 IaaS
6.1.1.2 PaaS
6.1.1.3 SaaS
6.1.2 Private Cloud
6.1.3 Hybrid Cloud
6.2 Organization Size
6.2.1 SMEs
6.2.2 Large Enterprises
6.3 End-user Industries
6.3.1 Manufacturing
6.3.2 Education
6.3.3 Retail
6.3.4 Transportation and Logistics
6.3.5 Healthcare
6.3.6 BFSI
6.3.7 Telecom and IT
6.3.8 Government and Public Sector
6.3.9 Others (Utilities, Media & Entertainment etc)
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Amazon.com Inc(AWS)
7.1.2 Google LLC
7.1.3 Microsoft Corporation
7.1.4 NTT Communications
7.1.5 NEC Corporation
7.1.6 Rackspace Technology, Inc
7.1.7 Oracle Corporation
7.1.8 IBM Corporation
7.1.9 Fujitsu Limited
7.1.10 Salesforce, Inc
7.1.11 SAP SE
8. MARKET OPPORTUNITIES AND FUTURE TRENDS
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.
By Type | |||||
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Private Cloud | |||||
Hybrid Cloud |
Organization Size | |
SMEs | |
Large Enterprises |
End-user Industries | |
Manufacturing | |
Education | |
Retail | |
Transportation and Logistics | |
Healthcare | |
BFSI | |
Telecom and IT | |
Government and Public Sector | |
Others (Utilities, Media & Entertainment etc) |
Japan Cloud Computing Market Research FAQs
How big is the Japan Cloud Computing Market?
The Japan Cloud Computing Market size is expected to reach USD 24.61 billion in 2024 and grow at a CAGR of 16.65% to reach USD 53.15 billion by 2029.
What is the current Japan Cloud Computing Market size?
In 2024, the Japan Cloud Computing Market size is expected to reach USD 24.61 billion.
Who are the key players in Japan Cloud Computing Market?
Microsoft Corporation, Amazon Web Services, Inc, Google LLC, Oracle Corporation and IBM Corporation are the major companies operating in the Japan Cloud Computing Market.
What years does this Japan Cloud Computing Market cover, and what was the market size in 2023?
In 2023, the Japan Cloud Computing Market size was estimated at USD 20.51 billion. The report covers the Japan Cloud Computing Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Japan Cloud Computing Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Japan Cloud Computing Industry Report
Statistics for the 2024 Japan Cloud Computing market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Japan Cloud Computing analysis includes a market forecast outlook for 2024 to 2029) and historical overview. Get a sample of this industry analysis as a free report PDF download.