In the manufacturing industry, cloud computing can help leaders improve their production efficiency by providing them with real-time data about their operations. This has gained the attention of the C-suite.
Total forecast Industrial Cloud platform revenue in manufacturing will surpass $300 billion by 2033 with a CAGR of 22.57 percent, driven by solution providers enhancing platform interoperability while expanding partner ecosystems for application development.
ABI Research found the cloud computing manufacturing market will grow over the next decade due to the adoption of new architectural frameworks that enhance data extraction and interoperability for manufacturers looking to maximize utility from their data.
Industrial Cloud Computing Market Development
"Historically, manufacturers have built out their infrastructure to include expensive data housing in the form of on-premises servers. The large initial upfront cost of purchasing, setting up, and maintaining these servers is a selling point for cloud manufacturing providers who beat them out in costs," said James Iversen, industry analyst at ABI Research.
With low data storage prices, the savvy manufacturers who make the switch to a cloud-based system can see up to 60 percent reduction in overhead costs relating to their data storage.
However, for the early adopter manufacturers who have outsourced their data storage to an external data warehouse provider, other problems can arise.
According to Iversen, "External Data Warehouses are prone to data fragmentation and duplication, along with creating data siloes where critical datasets sit independent of one another, not collaborating to produce new KPIs."
Cloud manufacturing providers are eliminating these concerns by inter-connecting applications bi-directionally, leading to sharing and communication between applications and their data.
ABI Research has examined revenue, market share, application offerings, and recent updates of the hyperscalers -- AWS, Microsoft, and Google, along with other key industry players, Alibaba, IBM, SAP, Tencent, and Oracle -- to complete a full analysis of the public cloud manufacturing market.
According to the ABI assessment, regarding the cloud computing hyperscalers, AWS and Microsoft provide comparable offerings and together represent 2/3 of market revenue in 2022 together.
Both have comparable payment options, data pricing (Microsoft narrowly beats out AWS), and application offerings where AWS holds the advantage.
AWS has slowly nudged away from Microsoft due to having an existing reputation as a dominant cloud service provider while also offering the most comprehensive suite of applications tailored to data ingestion, contextualization, and analysis.
Meanwhile, Google has been playing catch up to the other cloud hyperscalers from a technological standpoint with their new updates (Data Engine and Connect Edge) already having counterparts at AWS and Microsoft, hindering their market share in comparison.
Outlook for Industrial Cloud Applications Growth
New 2023 updates from AWS and Microsoft support this trend as comparable architectural structures fabric were released on their platforms for enhanced data connection, interoperability, and communication between applications.
"Two key domains which are seeing significant investments are data packaging in the edge prior to uploading to the cloud and low/no code pipelines with reduced latency. Look to see Google, Alibaba, IBM, SAP, Tencent, and Oracle follow in step with these developments, advancing their solution offerings in these areas," Iversen concludes.
That said, I believe Industrial Cloud Computing service offerings offer a wide range of benefits that can help businesses improve their efficiency, agility, security, compliance, and innovation. As a result, it's no surprise that senior executives are exploring new offerings.