Cloud services (IaaS/PaaS) market size in Japan 2021-2027

The domestic cloud services market in Japan, which consists of Infrastructure as a Service (IaaS) and Platform as a Service (PaaS), was estimated at 1.94 trillion Japanese yen in 2023. Based on the assumption that more and more companies would consider to replace legacy systems and invest in solutions which further digital transformation (DX) and data-driven management approaches, it was expected that the market would reach a size of 3.8 trillion yen by 2027.

Utilization of cloud services in Japan

A survey among Japanese companies showed that a majority of business enterprises were already using cloud computing to varying degrees. The same survey also revealed that cloud services were utilized for a variety of different purposes, with file storage and data sharing topping the ranking of the most popular types of cloud computing services. A breakdown of the utilization rate of cloud services by capital size indicated that utilization was much more common among larger companies than among smaller ones.

Japan’s digital strategy

The Japanese IT industry has come more and more into focus as digitization has increasingly impacted the economy and people’s private lives in recent years. While Japan is known for its advanced technology, it has also been said to exhibit sluggish behavior regarding digital transformation processes. In recent years, the government introduced a number of initiatives which aimed at improving Japan’s position in the digital age. In 2016, the Council for Science, Technology and Innovation (CSTI), which is part of the Cabinet Office, introduced the concept of “Society 5.0” in its Fifth Science and Technology Basic Plan, which delineated a society in which cyberspace and the physical world are increasingly connected with each other. The realization of Society 5.0 and the 2020 Tokyo Olympic Games led to increased efforts to improve Japan’s cyber security strategy and to prevent cyber crimes. For all these projects, solutions offered by the IT industry were necessary, providing ample market opportunities for companies engaged in the IT business.