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Home ➤ Information and Communications Technology ➤ Cloud Sustainability Market
Cloud Sustainability Market
Cloud Sustainability Market
Published date: October 2024 • Formats:
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  • Home ➤ Information and Communications Technology ➤ Cloud Sustainability Market

Global Cloud Sustainability Market By Component (Solutions, Services), By Model (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), Others), By End-Use (IT and Telecom, BFSI, Healthcare, Retail & E-commerce, Manufacturing, Others), Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

  • Published date: October 2024
  • Report ID: 130272
  • Number of Pages: 290
  • Format:
  • Overview
  • Table of Contents
  • Major Market Players
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    • Report Overview
    • Key Takeaways
    • Cloud Sustainability Statistics
    • Component Analysis
    • Model Analysis
    • End-Use Analysis
    • Key Market Segments
    • Driver
    • Restraint
    • Opportunity
    • Challenge
    • Business Benefits
    • Emerging Trends
    • Regional Analysis
    • Key Player Analysis
    • Recent Developments
    • Report Scope

    Report Overview

    The Global Cloud Sustainability Market size is expected to be worth around USD 112.7 Billion By 2033, from USD 19.7 Billion in 2023, growing at a CAGR of 19.05% during the forecast period from 2024 to 2033.

    Cloud sustainability refers to the practice of using cloud computing resources in an environmentally friendly way. This means designing and running cloud systems to minimize energy use, reduce waste, and lower carbon emissions. Companies aim to make their cloud operations more efficient and use clean energy sources to power data centers. The goal is to enjoy the benefits of cloud computing while reducing its negative impact on the environment.

    The cloud sustainability market involves products, services, and technologies that help make cloud computing more environmentally friendly. This market includes tools for measuring and reducing energy use in data centers, software for optimizing cloud resources, and consulting services to help companies improve their cloud sustainability. As more businesses focus on reducing their environmental impact, the demand for these sustainability solutions is growing.

    Cloud Sustainability Market

    Market demand for cloud sustainability solutions is surging as companies are under increasing pressure to comply with environmental regulations and societal expectations for sustainable practices. This demand is further fueled by the tangible benefits these solutions offer, such as cost savings from reduced energy consumption and improved operational efficiencies. Businesses across various sectors, including IT, manufacturing, and services, are actively seeking cloud-based technologies that can help them meet their green goals.

    Moreover, Cloud sustainability has become popular not just among environmentally conscious companies but also among those looking to enhance their brand reputation and consumer appeal. The ability to advertise reduced carbon footprints and more efficient operations is a significant draw for companies. The rise in popularity can also be attributed to the increasing availability of customizable cloud solutions tailored to specific industry needs, making sustainable practices more accessible and appealing.

    The market presents numerous opportunities, particularly in the development of more advanced cloud infrastructure that is even more energy-efficient. There is also significant potential in integrating renewable energy sources with cloud data centers to further decrease the environmental impact. Another area of opportunity lies in creating industry-specific solutions that address unique sustainability challenges, offering vast potential for cloud service providers and technology innovators.

    Cloud adoption is playing a pivotal role in advancing sustainability goals among major providers and across industries. According to Cloudwards, the leading cloud service providers, AWS and Microsoft Azure, are targeting the use of 100% renewable energy by 2025, with plans to become water-positive by 2030. Microsoft, further emphasizing its environmental commitments, aims to be carbon-negative by 2030 and intends to remove all historical carbon emissions by 2050.

    Similarly, Amazon and Google have set ambitious goals to achieve net-zero carbon emissions by 2040 and 2030, respectively. The migration to cloud infrastructure is not only driving operational efficiency but also contributing to substantial environmental benefits.

    Cloud adoption could eliminate around 59 million tons of carbon dioxide, and industries such as e-commerce and media and entertainment are leading this shift, with a higher proportion of workloads already transitioned to the cloud. Additionally, cloud migration has the potential to reduce carbon emissions by up to 84%, offering a significant opportunity for organizations to align with global sustainability initiatives

    Key Takeaways

    • The Global Cloud Sustainability Market is projected to grow significantly, reaching an estimated USD 112.7 billion by 2033, up from USD 19.7 billion in 2023. This growth reflects a compound annual growth rate (CAGR) of 19.05% during the forecast period from 2024 to 2033.
    • In 2023, the Solutions segment led the cloud sustainability market, capturing over 67% of the share.
    • The Infrastructure as a Service (IaaS) segment also held a strong position in 2023, accounting for more than 40% of the market.
    • Additionally, the IT and Telecom segment dominated the cloud sustainability market with a share exceeding 35% in 2023.
    • In 2023, North America held a dominant market position, capturing more than 38% market share with approximately USD 7.4 billion in revenue.

    Cloud Sustainability Statistics

    • The global cloud market value in earnings before tax, depreciation, and amortization (EBITDA) is projected to reach approximately $3 trillion by 2030.
    • A significant 85% of executives recognize that customers are more likely to engage with and support sustainable brands.
    • However, 78% of executives report they are under pressure to achieve sustainability goals with less financial resources than before.
    • A majority, 84% of executives, believe their sustainability efforts would be more effective if they had a clear structure and accountability in place.
    • According to a study by Accenture, only 4% of CEOs in the United Nations Global Compact – Accenture Strategy CEO Study on Sustainability foresee their company reaching a net-zero future within the next ten years.
    • Organizations adopting sustainable cloud practices report up to 20% cost savings in cloud expenses and a 30% reduction in energy consumption.
    • By 2027, 80% of chief information officers (CIOs) will use sustainability as one of the performance metrics for IT organizations.
    • Cloud migrations are expected to reduce carbon dioxide emissions by 59 million tons per year, which is the equivalent of taking 22 million cars off the road annually.

    Component Analysis

    In 2023, the Solutions segment held a dominant position in the cloud sustainability market, capturing more than a 67% share. This segment’s leadership is primarily attributed to the increasing adoption of cloud-based solutions that help organizations optimize their resource use and energy efficiency. Cloud solutions are integral in monitoring and managing the energy consumption of IT systems and operations, making them a critical component in achieving sustainability goals.

    The dominance of the Solutions segment is further reinforced by the continuous development of innovative and more effective cloud solutions tailored to sustainability. Companies are investing in solutions that not only help in reducing carbon footprints but also in managing waste and water usage, showcasing a comprehensive approach to sustainability. This has led to a broad acceptance of these solutions across various industries, from manufacturing to finance, all seeking to enhance their environmental stewardship.

    The Solutions segment benefits from the scalability and flexibility that cloud platforms offer. Businesses can implement sustainability solutions with minimal upfront investment and adjust their usage based on actual needs, which is not as feasible with on-premises solutions. The cost-effectiveness combined with significant improvements in operational efficiencies continues to drive the segment’s growth and dominance.

    Also, the rising regulatory pressure and consumer demand for greener practices have made sustainability solutions a competitive necessity rather than just an optional investment. Companies that adopt these cloud-based solutions are not only able to meet compliance standards more efficiently but also position themselves as responsible leaders in their respective markets. This has created a strong and ongoing demand for the Solutions segment within the cloud sustainability market.

    Model Analysis

    In 2023, the Infrastructure as a Service (IaaS) segment held a dominant market position in the cloud sustainability market, capturing more than a 40% share. This segment’s leadership stems largely from its foundational role in providing virtualized computing resources over the internet, which is pivotal for companies looking to scale their operations sustainably. IaaS offers businesses the flexibility to manage and scale their IT resources based on demand, reducing the need for physical hardware and thus minimizing their environmental footprint.

    The prominence of the IaaS segment is also bolstered by its ability to facilitate significant reductions in energy usage. By centralizing resources in highly efficient data centers, IaaS providers can achieve much higher energy efficiency compared to traditional on-premises data centers. This efficiency is a key factor in the segment’s appeal, as it aligns with the growing corporate emphasis on reducing energy consumption as part of broader sustainability goals.

    IaaS platforms inherently encourage the optimization of resource allocation. They allow businesses to use exactly what they need without overprovisioning, leading to more efficient use of energy and resources. This not only helps in reducing operational costs but also enhances the sustainability of business operations, making the IaaS model particularly attractive for companies committed to environmental stewardship.

    Furthermore, the IaaS segment’s ability to integrate with other sustainability-oriented technologies, such as artificial intelligence and machine learning for optimizing data center operations and energy use, adds another layer of attractiveness. These integrations help in continuously improving the efficiency and sustainability of cloud services, securing the IaaS model’s leading position in the cloud sustainability market.

    cloud sustainability market Share

    End-Use Analysis

    In 2023, the IT & Telecom segment held a dominant market position in the Cloud Sustainability Market, capturing more than a 35% share. This leadership can be primarily attributed to the sector’s substantial investments in cloud infrastructure aimed at reducing carbon footprints and enhancing operational efficiencies. IT & Telecom companies are increasingly adopting cloud services to leverage advanced data analytics and machine learning capabilities, which are crucial for optimizing energy usage and managing data center resources effectively.

    There is push towards more sustainable practices within the IT & Telecom industry is driven by growing regulatory pressures and the corporate social responsibility agendas of major players. These companies are at the forefront of integrating renewable energy sources into their operations and deploying energy-efficient systems, which significantly contribute to their leading position in the cloud sustainability market.

    The increasing demand for cloud services with lower environmental impact also plays a pivotal role. As data consumption and mobile broadband usage skyrocket, telecom companies are seeking innovative ways to minimize their environmental footprint. Utilizing cloud solutions allows these companies to achieve more sustainable growth by reducing the energy consumption per unit of data processed.

    IT & Telecom sector’s pioneering role in adopting new technologies makes it a critical driver of trends in the Cloud Sustainability Market. By setting standards for sustainable practices, they not only lead by example but also create a competitive edge that compels other industries to follow suit, further cementing their leadership in this market segment.

    Key Market Segments

    By Component

    • Solutions
    • Services

    By Model

    • Infrastructure as a Service (IaaS)
    • Platform as a Service (PaaS)
    • Software as a Service (SaaS)
    • Others

    By End-Use

    • IT and Telecom
    • BFSI
    • Healthcare
    • Retail & E-commerce
    • Manufacturing
    • Others

    Driver

    Increased Demand for Energy Efficiency

    The significant driver for the cloud sustainability market is the increased focus on energy efficiency within data centers. Companies are adopting cloud technologies that offer better server utilization and more energy-efficient infrastructure, reducing the total cost of ownership by up to 30-40%.

    Additionally, migrating to public clouds can potentially lower CO2 emissions substantially, equivalent to removing millions of cars from the road annually. This migration also facilitates new opportunities for clean energy transitions and efficient resource use, highlighting the cloud’s role in supporting environmental sustainability​.

    Restraint

    High Initial Investment in Green Cloud Infrastructure

    Despite the benefits, one major restraint in the Cloud Sustainability Market is the high initial investment required to transition to greener infrastructure. Cloud providers need to invest in renewable energy sources, energy-efficient technologies, and advanced cooling systems to make their services more sustainable.

    These investments, while reducing operational costs in the long run, require substantial upfront capital, which can be a significant deterrent for smaller cloud providers or companies looking to enter the market. Additionally, transitioning existing data centers to sustainable models can be both costly and time-consuming, requiring businesses to overhaul their current systems.

    Opportunity

    Growing Regulatory Support for Sustainable Practices

    One of the key opportunities for growth in the Cloud Sustainability Market is the increasing regulatory support for sustainable practices across industries. Governments and regulatory bodies around the world are introducing policies and incentives to encourage businesses to adopt environmentally friendly solutions.

    In many regions, companies that use green cloud services can benefit from tax breaks, subsidies, or other financial incentives, making sustainable cloud options more attractive. As these regulations become more stringent, companies will have to adapt to comply, pushing them toward sustainable cloud services. This creates a significant opportunity for cloud providers to capture a growing market of businesses seeking to meet regulatory requirements while enhancing their sustainability efforts.

    Challenge

    Balancing Performance with Sustainability

    One of the major challenges in the Cloud Sustainability Market is balancing performance with sustainability. As cloud services become more sustainable, there is often a trade-off in terms of performance, particularly for high-computational workloads.

    Energy-efficient data centers may prioritize power savings over processing speed, which can impact the performance of applications that require significant computational power, such as artificial intelligence, machine learning, and big data analytics. This can be a major concern for businesses that rely on high-performance computing (HPC) to run critical applications. As a result, some companies may hesitate to fully adopt sustainable cloud solutions due to fears of reduced performance.

    Business Benefits

    Embracing cloud sustainability offers businesses multiple benefits beyond environmental impact. Companies that adopt sustainable cloud solutions can significantly reduce their operational costs by lowering energy consumption and improving resource efficiency. Moreover, aligning with sustainability goals can enhance a company’s brand image, attracting environmentally conscious consumers and investors.

    Additionally, cloud sustainability initiatives can help businesses comply with increasing regulatory demands, potentially leading to tax benefits and incentives. Ultimately, adopting sustainable cloud practices helps businesses future-proof their operations, making them more resilient in the face of climate change and regulatory changes while contributing to long-term growth and competitiveness.

    Emerging Trends

    • Adoption of Renewable Energy for Data Centers: Major cloud service providers are increasingly powering their data centers with renewable energy sources such as wind, solar, and hydroelectric power. This trend helps reduce carbon footprints and aligns with global sustainability goals.
    • Energy-Efficient Hardware: Cloud providers are investing in advanced, energy-efficient hardware and cooling systems that reduce power consumption while maintaining high levels of performance. Technologies like liquid cooling and AI-driven optimization are playing a significant role.
    • Carbon Neutral and Net-Zero Goals: Many companies in the cloud space are committing to carbon neutrality or achieving net-zero emissions. This includes initiatives to offset emissions through carbon credits or investing in projects that remove CO2 from the atmosphere.
    • Green Cloud Certifications: The rise of certifications such as LEED (Leadership in Energy and Environmental Design) for data centers is becoming a benchmark for cloud sustainability. Companies are obtaining these certifications to highlight their commitment to eco-friendly operations.
    • Circular Economy Initiatives: Cloud providers are focusing on hardware recycling and repurposing, aiming to create a circular economy. By extending the lifecycle of their infrastructure, they reduce waste and further contribute to sustainability goals.

    Regional Analysis

    In 2023, North America held a dominant market position, capturing more than 38% market share with approximately USD 7.4 billion in revenue. The region’s leadership in the Cloud Sustainability Market is driven by several factors, including the presence of major cloud providers like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which are heavily investing in sustainable cloud infrastructure.

    These companies have made significant strides in adopting renewable energy sources, optimizing energy efficiency in data centers, and setting ambitious carbon-neutral or net-zero emission goals. Their sustainability initiatives are well-aligned with regulatory frameworks in the U.S. and Canada, which encourage energy-efficient technologies and the use of renewable energy.

    North America’s technological advancements and large-scale adoption of cloud computing across industries such as finance, healthcare, and retail contribute to its leading position. The region’s businesses are keen on reducing their carbon footprint while optimizing operational efficiency, making sustainable cloud solutions an attractive option. The region also benefits from a strong regulatory environment that incentivizes green technologies. For example, certain states in the U.S. provide tax benefits for companies that adopt energy-efficient and sustainable practices, further driving market growth.

    Europe follows closely in the Cloud Sustainability Market, driven by strict environmental regulations like the EU’s Green Deal and its commitment to carbon neutrality by 2050. Cloud providers in the region are increasingly investing in green data centers and renewable energy projects. Meanwhile, the Asia-Pacific (APAC) region is witnessing significant growth due to rapid digital transformation and government initiatives promoting green technology.

    Regions like Latin America and the Middle East & Africa are still in the early stages of adopting cloud sustainability. However, they are expected to experience growth as cloud infrastructure expands and government policies favor sustainable practices in the coming years. These regions are gradually implementing renewable energy projects, contributing to the long-term growth of the Cloud Sustainability Market.

    Cloud Sustainability Market

    Key Regions and Countries Covered in this Report:

    • North America
      • The US
      • Canada
    • Europe
      • Germany
      • France
      • The UK
      • Spain
      • Italy
      • Russia
      • Netherland
      • Rest of Europe
    • APAC
      • China
      • Japan
      • South Korea
      • India
      • Australia
      • New Zealand
      • Singapore
      • Thailand
      • Vietnam
      • Rest of APAC
    • Latin America
      • Brazil
      • Mexico
      • Rest of Latin America
    • Middle East & Africa
      • South Africa
      • Saudi Arabia
      • UAE
      • Rest of MEA

    Key Player Analysis

    The Cloud Sustainability market is driven by several key players, each contributing significantly to the industry’s growth through innovative solutions and strategic partnerships. Major companies include Amazon Web Services (AWS), Salesforce, Inc., Dell Technologies Inc., Google LLC, and IBM Corporation, which lead the market with advanced cloud technologies and sustainability-focused initiatives.

    Amazon Web Services, Inc. (AWS) leads prominently in the Cloud Sustainability space, leveraging its massive infrastructure to promote energy-efficient cloud solutions. AWS is renowned for its commitment to running its operations on renewable energy. The company has launched numerous initiatives aimed at reducing the carbon footprint of its data centers, which is a significant concern for environmentally conscious consumers and businesses. Their leadership in the market is not just about size but also about the depth of their commitment to sustainable practices.

    Microsoft Corporation stands out for its innovative approaches to cloud sustainability, particularly through its Azure platform. The company’s strategy involves developing tools that enable better energy efficiency and lower emissions for its cloud services. Microsoft has also made bold commitments to reducing its carbon emissions, aiming for carbon negativity by 2030. This commitment reflects in their product offerings and operations, making them a strong contender in the cloud sustainability sector.

    Google LLC is a pioneer in adopting and promoting sustainable solutions within the cloud domain. Known for its “cleanest cloud” initiative, Google Cloud aims to operate entirely on carbon-free energy by 2030. Their active investment in renewable energy projects and green computing technologies places them at the forefront of the cloud sustainability movement. Google’s approach not only enhances its market position but also sets a high standard for environmental responsibility in the tech industry.

    IBM Corporation focuses on integrating sustainability with cloud technology through its IBM Cloud. The company emphasizes high-efficiency cloud computing solutions and has been involved in developing AI and blockchain technologies to enhance environmental management and energy efficiency. IBM’s longstanding reputation for innovation supports its efforts in promoting sustainable practices across its global cloud infrastructure.

    Top Key Players in the Market

    • Amazon Web Services, Inc.
    • Microsoft Corporation
    • Google LLC
    • IBM Corporation
    • Oracle Corporation
    • SAP SE
    • Salesforce, Inc.
    • Dell Technologies Inc.
    • Equinix, Inc.
    • Other Key Players

    Recent Developments

    • In May 2024, SAP broadened its cloud sustainability initiatives through a strategic partnership with CP Foods. This collaboration is designed to integrate sustainable cloud solutions that reduce operational energy use, supporting wider sustainability objectives. By joining forces, SAP and CP Foods are enhancing their commitment to environmentally responsible practices within cloud computing.​
    • In Q1 2024, Google Cloud experienced notable growth, with a 28% year-over-year revenue increase, largely due to its sustainable cloud infrastructure. Google’s focus on carbon-neutral cloud services and AI-driven energy management tools is key to its growth​.
    • In 2024, IBM deepened its collaboration with AWS by expanding its portfolio of Software-as-a-Service (SaaS) products available on AWS. This includes sustainability-focused tools like IBM Maximo Application Suite, which helps companies monitor and maintain equipment more efficiently, potentially reducing energy consumption. This partnership enhances both companies’ cloud offerings, with a strong focus on sustainability and automation​.
    • In 2024, Microsoft Corporation continues to strengthen its cloud sustainability initiatives through its Azure Sustainability Calculator, which helps customers track, report, and reduce their carbon emissions associated with cloud usage. This tool encourages organizations to adopt more sustainable cloud practices, aligning with global carbon reduction goals​.

    Report Scope

    Report Features Description
    Market Value (2023) USD 19.7 Bn
    Forecast Revenue (2033) USD 112.7 Bn
    CAGR (2024-2033) 19.05%
    Base Year for Estimation 2023
    Historic Period 2019-2022
    Forecast Period 2024-2033
    Report Coverage Revenue Forecast, Market Dynamics, COVID-19 Impact, Competitive Landscape, Recent Developments
    Segments Covered By Component (Solutions,Services), By Model (Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), Others), By End-Use (IT and Telecom, BFSI, Healthcare, Retail & E-commerce, Manufacturing, Others)
    Regional Analysis North America – US, Canada; Europe – Germany, France, The UK, Spain, Italy, Russia, Netherlands, Rest of Europe; Asia Pacific – China, Japan, South Korea, India, New Zealand, Singapore, Thailand, Vietnam, Rest of APAC; Latin America – Brazil, Mexico, Rest of Latin America; Middle East & Africa – South Africa, Saudi Arabia, UAE, Rest of MEA
    Competitive Landscape Amazon Web Services, Inc.Microsoft Corporation,Google LLC,IBM Corporatio, Oracle Corporation, SAP SE, Salesforce, Inc.,Dell Technologies Inc.,Equinix, Inc.,Other Key Players
    Customization Scope Customization for segments, region/country-level will be provided. Moreover, additional customization can be done based on the requirements.
    Purchase Options We have three license to opt for: Single User License, Multi-User License (Up to 5 Users), Corporate Use License (Unlimited User and Printable PDF)
    Cloud Sustainability Market
    Cloud Sustainability Market
    Published date: October 2024
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    • Amazon Web Services, Inc.
    • Microsoft Corporation Company Profile
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    • IBM Corporation
    • Oracle Corporation
    • SAP SE Company Profile
    • Salesforce, Inc.
    • Dell Technologies Inc.
    • Equinix, Inc.
    • Other Key Players
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