Japan - Country Commercial Guide
Cloud Computing

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-10-30

Table : Domestic Public Cloud Market

 

2017

2018

2019

2020 estimated

Total Market Size
($ million)

4,475

6,058

8,098

9,363

Market Growth Rate
(Based on Japanese Yen)

29.8%

27.2%

22.9%

-

Exchange Rates

112.1

110.4

108.4

106.8

Source: IDC domestic public cloud service market research 2017, 2018, 2019 and 2020

Overview

Japan is a leading cloud computing market in Asia.  The Software Alliance/BSA ranked Japan as the number two market in its most recent Global Cloud Computing Scoreboard, a global report to rank countries’ preparedness for the adoption and growth of cloud computing services. Japan’s comprehensive suite of modern laws, as well as privacy legislation, contributed to its high ranking, as these factors support and facilitate the digital economy and cloud computing. Further, Japan has one of the most extensive broadband fiber deployments with the largest number of fiber users in the world. This factor also contributed positively to Japan’s overall ranking position. 

International Data Corporation Japan (IDC) predicts the size of the total public cloud services market is $8.7 billion – an increase of 22.9% over the previous year. In addition, as a whole, the public cloud market including IaaS/PaaS/SaaS in Japan is predicted to reach to $10 billion in 2020.

Analysts project that from 2019 to 2024, the public cloud services market in Japan will grow nearly 18.7% annually. The market size is expected to grow to be approximately $26.4 billion in 2024, which is 2.4 times of the market size in 2019.  Driving this estimate is the increasing adoption of cloud services by Japanese small and medium-sized enterprises. Japan’s cloud services market expansion is the product of direct private and public investment in ICT infrastructure and a commitment to cloud services by the government.

With regards to the market share of IaaS in 2019, MM Research Institute announced that Amazon Web Services’ market share was 51.9%, Microsoft Azure acquired 30.8% and Google Cloud’s had 13.9% in Japan. In total, US cloud firms successfully occupied approximately 96% market share in Japan.

Sub-sectors

Among the public could market, SaaS (Software as a Service) constitutes approximately 40% in 2018 per Fuji Chimera Research Institute’s report published in 2019. Also FCRI predicts that SaaS market is growing and account for about half of the public cloud market in 2023.

IDC reported that Vertical SaaS Market, industry-specific SaaS for education, health, retail, construction, real estate and other business categories, is expected to grow in the future, and also Horizontal SaaS Market, cross-sectional SaaS as Marketing, Business Collaboration, HR or Corporate Planning,  is estimated a stable market growth.

Boxil, business media for cloud business, published a SaaS market report in 2019 and reported the following points. There are about 700 SaaS players including Japanese and international companies in Japan and its number is still increasing. With regards to the Horizontal SaaS market, US companies has a huge advantage in the Business collaboration and Marketing/Sales area. Furthermore, the following categories as inside sales, lead management and knowledge management will be more focused on as a growing category. Global SaaS market has reached $ 140 billion, and the US market constitutes about 50 to 70% per the Boxil’s report, therefore it means that US SaaS firms still have an advantage and there would be the potential for the US SaaS firms to enter and expand its business in Japan.

Opportunities

Japan IT week, Tokyo
October 28-30, 2020
https://www.japan-it.jp/en-gb.html

CEATEC 2020 - ONLINE
October 20-23, 2020
https://www.ceatec.com/en/application/

Nikkei XTECH EXPO 2020 - ONLINE
October 12-23,2020
https://expo.nikkeibp.co.jp/xtech/ex/


The American Chamber of Commerce in Japan and its ACCJ Digital Economy Committee actively advocates on important policy issues.

CS Japan Contact

Ms. Atsuko Shimada, Commercial Specialist

Atsuko.Shimada@trade.gov