How is cloud services adoption in India increasing to $17bn?

The cloud computing market in India is expected to rise at an outstanding 24.3% CAGR and reach a startling $17 billion by 2025, marking a remarkable surge. This rapid growth results from the fast transition to cloud-based technology and is not merely a statistic. It is driven by the extensive digital transformation that is occurring across industries. The Indian cloud market alone was valued at $7–10 billion in 2023, and experts predict it will grow faster as it follows the global trend. The services industry is expanding far quicker than anticipated as the business world becomes more cloud-friendly. However, what is triggering this rise? And what do businesses need to know to manage this cloud evolution successfully?
What’s driving this cloud adoption boom?
The market for cloud services in India has been expanding exponentially. There are multiple factors contributing to this surge:
• Digital transformation
Cloud adoption is rising due to the government's "Digital India" initiative and the private sector's drive for digital-first business strategies. According to a recent KPMG report, 65% of Indian businesses are increasing their efforts at digital transformation, with many of them mainly depending on cloud services to remain competitive.
• Rising investments
F&S predicts that cloud services in India will grow 25% per year over the next five years due to significant investments from international firms.
• Growth of SMEs and Startups
As of 2024, India has established 50,000 tech businesses, and the startup ecosystem is thriving. Many SMBs use cloud services to scale more quickly, embrace flexible business models, and reduce infrastructure costs.
• Increasing data consumption
An analysis projects that by 2026, India's data usage will rise by 25% yearly, increasing demand for cloud storage and data services. The nation's growing internet infrastructure speeds up the adoption of cloud computing even more.
What are the factors that are driving cloud adoption?
Cloud services are getting widely adopted in India due to several important factors:
• Cost efficiency:
Cloud computing has replaced Indian organizations' on-premises infrastructure. According to a survey, 47% of Indian businesses claimed that cloud services reduced their IT infrastructure expenses by 25% to 30%.
• Flexibility and scalability
Businesses are rapidly expanding their infrastructure as India's economy advances. By 2025, 85% of Indian companies are expected to use hybrid cloud solutions to meet their needs for agility and scalability.
• Improved collaboration
Cloud collaboration tools are critical for real-time communication, as the popularity of remote and hybrid work patterns has grown in recent years. According to a survey, employee productivity has increased by 30% because 73% of Indian organizations use cloud-based collaboration tools more often.
• Compliance and security
Cloud providers are providing substantial protection to counter growing cyber threats. According to 92% of Indian organizations, advanced encryption and multi-layered defenses have improved security.
• AI and big data integration
India's expanding tech sectors fuel the need for AI-driven solutions. The fact that 35% of India's cloud market will be AI-powered by 2027 will highlight advanced tech integration.
What should you look for when switching to cloud services?

Given India's growing number of cloud providers, selecting the appropriate partner is essential. The following are important factors when opting for cloud services:
• Security features
According to a Cisco poll, security is the most important consideration for 60% of Indian firms when choosing a cloud service provider. Verify that your service provides multi-factor authentication and robust encryption and conforms with industry standards (including GDPR and HIPAA).
• Uptime and reliability
According to Statista, 97% of firms require 99.9% uptime and cloud outages can cause operational disruptions. Ensure your provider's service level agreement (SLAs) guarantee this reliability.
• Cost structure
Although cloud services are typically reasonable, it's essential to comprehend the pricing structure. According to Gartner's 2024 study on cloud services, 32% of businesses face unexpected costs due to hidden resource misuse, storage, or data transport fees. Be sure to read the fine print.
• Customer service and support
An IDC survey found that 68% of businesses stated that customer service is crucial when selecting cloud providers. Choose a supplier that offers timely, 24/7 service to ensure smooth operations.
• Integration capabilities
A smooth adoption of cloud computing requires a seamless interface with existing systems. According to a TechRepublic poll, 62% of Indian businesses ranked ease of integration as their top priority, highlighting the significance of API compatibility with key business tools.

What are the key cloud service trends to watch?
Several trends could change the landscape as the cloud market develops further:
• Multi-cloud and hybrid strategies
Multi-cloud and hybrid configurations are becoming increasingly popular among businesses. A study claims that 57% of Indian companies either utilize hybrid cloud models now or intend to do so to boost flexibility and lower the risks associated with relying solely on one cloud provider.
• AI-powered cloud services
Since machine learning and artificial intelligence are becoming highly crucial to corporate operations, cloud services are developing to incorporate these features. India's cloud services AI industry will be $10.7 billion by 2025.
• Edge computing
The growth of IoT devices is driving the need for low-latency processing. According to Gartner, India is expected to play a significant role in the global edge computing industry, reaching $16.7 billion by 2025.
• Cloud Security
Cloud security is becoming crucial as cyber threats are evolving significantly. Cloud-related security incidents are predicted to rise by 25% a year. 83% of businesses want to use advanced cloud security solutions, such as Zero Trust Architecture (ZTA), by 2026.
• Cloud for SMBs
Cloud computing is not just for big businesses. According to a PwC India survey, 72% of Indian SMBs expect to use the cloud by 2025 due to its cost-effectiveness, scalability, and flexibility.
Wrapping up
The cloud market in India is expected to grow to $17 billion by 2025 because of data-driven businesses, increased demand, and rising expenditures on digital technologies. A dynamic workforce, government efforts, and the increasing demand for scalable, affordable solutions are some of the main factors driving growth.
Businesses facing digital transformation must choose the right cloud provider. At ESDS, we provide cost-effective, scalable, and secure cloud solutions customized to meet your needs. Our experience and cutting-edge infrastructure guarantee success whether you're implementing cutting-edge technologies like artificial intelligence, growing your cloud infrastructure, or moving to the cloud.
Visit us: https://www.esds.co.in/cloud-services
For more information, contact Team ESDS through:
🖂 Email: getintouch@esds.co.in; ✆ Toll-Free: 1800-209-3006; Website: https://www.esds.co.in/