Cloud Computing Migration & Managed Services

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Cloud Computing Migration & Managed Services

Since there are no preexisting industry studies available for the public on the market size pertaining to cloud computing migration and managed services in Canada, the presented market size data was based on triangulation derived from available and reliable statistics and industry reports.

The current (2017) estimated market size for Canada's cloud computing migration & managed services is $55.4 million (C$69.3 million).
According to a report by Canadian Channel Chiefs Council, "the Canadian market generally lags behind other developed markets, particularly the United States, in cloud adoption." Additionally, the report stated that "the Canadian market appears to be unique due to the high proportion of small and medium-sized businesses, which make up over 99% of the total number of active businesses in Canada."

INDUSTRY MARKET REPORTS

MarketsandMarkets

According to this report, the global cloud computing migration services market size in 2016 was at $2.73 billion and is forecast to reach $9.47 billion by 2022 at a computed annual growth rate of 24.5%. This, however, includes managed services together with DevOps and disaster recovery services. North America has a market share of 44% ($1.20B in 2016).

Forbes report

According to this report from Forbes, global cloud computing (in general) is "projected to increase from $67B in 2015 to $162B in 2020 attaining a compound annual growth rate (CAGR) of 19%." In 2016, global cloud computing market hits $82 billion.

IDC report as released by Computer Dealer News

Due to lack of any publicly available reports for Canada in the recent years, I have considered this industry report by IDC released in 2012 with a forecast of 2016 market size. In 2012, IDC released a report stating that Canadian cloud computing market is forecast to reach $1.39 billion by 2016, with a compound annual growth rate of 30%.

Radius ITS report

This report from Radius ITS mentioned that overall in the Managed Services market, "cloud migration services will have its own share that reaches $7 billion by 2021." This is a global figure and the report it references from MarketsandMarkets is provided below.

MarketsandMarkets report through Free Press Release Info Center

In reference to the Managed Services global market, cloud computing migration services market size is "estimated to grow from USD 2.42 Billion in 2016 to USD 7.06 Billion by 2021, at a Compound Annual Growth Rate (CAGR) of 23.9% from 2016 to 2021."

TechNavio report

"TechNavio's analysts forecast the Cloud Computing market in Canada will grow at a CAGR of 17.8 percent over the period 2013-2018."

CALCULATIONS AND ESTIMATIONS

Using the acquired data from different industry reports presented above, the below summary of calculations was derived.

Data points given are for 2016 and in US dollar unless otherwise noted. Most data available are from 2016, therefore I will be using 2016 data and will use CAGR to calculate for 2017. The below top-down analysis calculation is presented in 3 different estimate derivation.

**Estimation no. 1

Global cloud computing market size = $82B
Global cloud migration services market size = $2.73B
Percentage of global cloud migration services against total cloud computing = ($2.73B/$82B)*100 = 3.3%

Assuming the global trend is parallel with the Canadian market;

Canadian cloud computing market size = $1.39 billion
Canadian cloud migration services market size = $1.39 billion * 3.3% = $45.87 million (1)

**Estimation no. 2

Another estimation method to calculate market size is per below:

Global cloud computing market size = $82B
Canadian cloud computing market size = $1.39 billion
Percentage of Canada's cloud computing market size against global = ($1.39/$82)*100 = 1.70%
Global cloud migration services market size = $2.73B

Assuming that global trend is concurrently parallel with Canada's market trend;

Canadian cloud migration services market size = $2.73B * 1.70% = $46.41 million (2)

**Estimation no. 3

Using another report based on Managed Services market in reference to cloud computing migration services;

Global cloud computing migration services market size = $2.42B
Canadian cloud migration services market size = $2.42B * 1.70% = $41.14 million (3)

For the purpose of this research, I will be using the average market size from the 3 results.

Market size = ($45.87 million+$46.41+$41.14)/3 = $44.47 million (2016)

To calculate the market size for 2017, using CAGR for global cloud migration services at 24.5%;

Canadian market size for Cloud Computing Migration & Managed Services for 2017 = $44.47 million * 1.245 = $55.4 million (or equivalent to about C$69.3 million)

Conversion rate used:
1 USD = 1.24603 CAD (C$)

CONCLUSION

North America's market size for cloud computing migration services is currently more than $1 billion, and considering the estimated Canadian market size which is at $55.4 million (or equivalent to about C$69.3 million), Canada has its share for about 5%. However, a positive outlook in this industry is foreseen as according to a report, public cloud services expenditures in Canada is growing and expected to reach $10 billion by 2019, from $5.4 billion in 2015.
Sources
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