Market Overview

Platform Engineering Market is taking a colossal growth curve exponentially with its market value reaching an amount of USD 5.1 billion by the end of 2023, and forecast numbers attaining a value of USD 51 billion by 2033 with a CAGR of 25.1% during 2023-2033.

Below table depicts the pricing model of major platform engineering companies within the market

Market Analysis By Open Source Strategy

An open-source strategy within the platform engineering market is a paradigm that emphasizes the use of open-source technologies, tools, and collaborative principles to design, develop, and manage platforms for a wide range of applications. This strategy capitalizes on the inherent advantages of open-source, including cost-efficiency, flexibility, and a community-driven approach.

Platform engineers often leverage open-source solutions as foundational elements, such as container orchestration platforms like Kubernetes or open-source databases, allowing for customization and extensibility to meet specific requirements. This approach not only leads to significant cost savings due to the absence of licensing fees but also promotes a culture of collaboration, where engineers can contribute to and benefit from the collective knowledge and expertise of the open-source community.

The open-source strategy accelerates development cycles, enhances security through transparency, and ensures interoperability, making it a compelling choice for organizations seeking agile, scalable, and innovative platform engineering market.

Market Scope

Market Dynamics

The exponential growth of the Internet of Things (IoT) and the advent of edge computing have become pivotal drivers in the platform engineering market. This surge in IoT-connected devices, ranging from smart appliances to industrial sensors, generates an unprecedented volume of data. As a result, there is an escalating need for robust platform engineering solutions that can efficiently manage, process, and analyze this data at the edge, close to the data source.

These platforms provide real-time insights, enabling businesses to make informed decisions, optimize operations, and enhance user experiences. Furthermore, as the IoT ecosystem continues to expand, the demand for platform engineering is expected to persistently rise, making it an essential cornerstone for businesses aiming to harness the full potential of connected devices and edge computing capabilities.

Below figure depicts the number of IoT Connected devices in billions

Source: We Market Research

The integration of artificial intelligence (AI) and machine learning (ML) into applications and services has emerged as a significant driving force in the platform engineering market. AI and ML technologies require sophisticated platforms capable of handling data processing, model training, and deployment at scale.

Platform engineering plays a pivotal role in meeting these requirements, offering the infrastructure and tools necessary to build and operate AI and ML applications effectively. These platforms facilitate the development of intelligent solutions across various industries, from personalized recommendations in e-commerce to predictive maintenance in manufacturing. As the demand for AI and ML continues to grow, so does the need for robust platform engineering solutions, positioning it at the forefront of technological advancement and innovation across diverse sectors.

We Market Research (Consumer Perception & Correlation) Analysis

We Market C&C analysis mainly focuses on key in demand factors from the consumer side that is leading to product adoption and also the variation within them. This variation will help the product owner in analyzing the product weakness and present a suitable solution to the customer as per their requirements. For this we performed a survey with a sample size of 350, that mainly consisted of software developers, business analyst, product owners and Chief technical officer and others.

Below figure depicts the overall key factors and the variation within platform engineering market in terms of product adoption and improvement

Source: We Market Research

From the figure it is evident that efficiency and agility were the first priority and had higher TOM (Top of Mind) among the respondents. Efficiency and agility can lead to cost savings in various ways. By automating repetitive tasks and streamlining processes, developers can reduce the resources required for software development. Furthermore, agility enables organizations to allocate resources more efficiently, adjusting priorities as needed.

However, one of the important aspect to be noted in this scenario is cost factor, which has recorded a higher power in 2022 as compared to 2021. Key factor behind this increase in cost power is the deployment of generative AI, Generative AI has emerged as a critical driver for the increasing demand in the platform engineering market. Its ability to create content, simulate environments, and facilitate data augmentation has opened up a realm of possibilities across diverse industries.

In content creation, generative AI is at the core of personalized recommendations, dynamic advertising, and even creative art and music generation, all of which rely on robust platform engineering to ensure seamless integration and deployment. In data science and machine learning, generative AI plays a pivotal role by synthesizing data to expand the available training datasets, improving model accuracy, and enhancing the capabilities of AI applications.

As per a recent survey by the Platform Engineering Alliance (PEA), the average cost of platform engineering is between 10% and 20% of the overall software development budget. As per our research the average cost of platform engineering for a fortune 500 company is between USD 10 to USD 30 million per year.

In order to reduce the cost, companies are focusing on the adoption of open source software, which provides a cost effective way for platform engineering operations.

Below figure depicts the relation between price drop vs open source adoption rate

Source: We Market Research

From the figure it is clear that, price drop and open source adoption rate has a negative correlation within the platform engineering market with correlation coefficient value -0.99.

Market Analysis By Type

Based on type, the platform engineering market is segmented into Cloud Platforms, Mobile Platforms, Web Platforms, IoT (Internet of Things) Platforms, Blockchain Platforms, Data Analytics Platforms. Cloud platforms dominate the market with an active share of 60% in 2022, backed by, multi-cloud and hybrid cloud adoption is on the rise, with organizations leveraging a combination of cloud providers to optimize performance, cost, and risk management. Platform engineers are tasked with creating solutions that seamlessly span multiple cloud environments.

Second, serverless computing is gaining prominence, enabling developers to focus solely on code without managing underlying infrastructure. As a result, platform engineers are working on crafting serverless platforms and solutions, offering enhanced scalability and cost-efficiency.

Third, edge computing is emerging as a critical trend, with cloud providers expanding their infrastructure to bring computing closer to the data source, reducing latency and supporting real-time applications. Platform engineering now encompasses edge platform development to enable processing at the edge of the network, which has boosted the growth of platform engineering market.

Lastly, observability and AIOps (Artificial Intelligence for IT Operations) are driving the adoption of advanced monitoring and analytics tools. Platform engineers are integrating these solutions to gain deeper insights into application and infrastructure performance, detect anomalies, and enhance overall system reliability.

Market Analysis End Use

Based on end use, the platform engineering market is segmented into Healthcare, Financial Services, Retail and E-commerce, Manufacturing, Transportation and Logistics, Energy and Utilities, Government, Telecommunications, Media and Entertainment, Education. In terms of market share healthcare industry dominates the market with a share of 22.16% in 2022. The healthcare sector is emerging as a dominant force in the platform engineering market, primarily due to several key drivers.

Firstly, the increasing demand for digital health solutions has driven healthcare organizations to leverage platform engineering for the development of telemedicine, electronic health records, and remote patient monitoring applications. These platforms enable efficient healthcare delivery, enhance patient experiences, and improve medical outcomes.

Secondly, data interoperability and security are paramount in healthcare, leading to a growing reliance on platform engineering. Robust, interoperable platforms facilitate the secure exchange of patient information, allowing healthcare providers to access and share data seamlessly while maintaining patient privacy and complying with healthcare regulations.

Third, AI and machine learning are revolutionizing healthcare, contributing to the demand for platform engineering solutions. These technologies power predictive analytics, disease diagnosis, and personalized treatment plans. Platform engineers play a crucial role in creating infrastructure that supports AI-driven applications, helping healthcare organizations harness the potential of platform engineering industry.

Fourth, the Internet of Things (IoT) has made significant inroads in healthcare, with the proliferation of medical devices and wearables. Platform engineering is essential for managing and processing the vast amount of data generated by these devices, enhancing healthcare providers' ability to monitor and diagnose patients remotely, this has created a positive perception for platform engineering market.

Market Analysis By Region

Based on geography, the platform engineering market is studied across North America, Europe, APAC, South America and MEA. North America dominates the platform engineering industry with a share of 40% in 2022. In North America, the market is characterized by several prominent trends that are shaping the industry.

First and foremost, there's a strong emphasis on cloud-native technologies, with organizations in the region increasingly adopting cloud platforms, microservices, and container orchestration tools like Kubernetes. This trend is driving platform engineers to develop and manage solutions that leverage the agility and scalability of the cloud.

Second, the proliferation of edge computing is a significant trend, particularly in the United States and Canada. Organizations are deploying edge platforms to reduce latency and enable real-time processing for applications such as IoT, autonomous vehicles, and content delivery. Platform engineering is pivotal in creating the infrastructure needed to support edge computing environments.

Third, security and compliance remain paramount. With stringent regulations like GDPR and evolving data protection laws in the U.S., there's a growing need for platform engineering solutions that prioritize security and data privacy. Engineers are focusing on building secure and compliant infrastructure, particularly in industries like finance, healthcare, and government.

Fourth, the adoption of DevOps and CI/CD practices is on the rise. Organizations are recognizing the benefits of automation, continuous integration, and continuous deployment in software development. Platform engineers are driving the adoption of these practices by creating the necessary tools and pipelines for efficient application delivery, thus creating a positive scope for platform engineering market.

Fifth, sustainability and environmental responsibility are increasingly influencing platform engineering in North America. Many companies are exploring green cloud initiatives and renewable energy sources for their data centers. Platform engineers are working to design eco-friendly solutions, contributing to a more sustainable IT landscape.

Lastly, the growing demand for low-code and no-code development platforms is reshaping the platform engineering market. These platforms empower non-developers to create applications, reducing the burden on traditional software engineers. Platform engineers are adapting to facilitate the integration of low-code/no-code tools into existing systems.

These key trends in North America highlight the region's dynamic and forward-thinking approach to platform engineering, driven by cloud-native technologies, edge computing, security, DevOps, sustainability, and the evolving landscape of low-code/no-code development.

Competitive Landscape

Some of the major companies operating within the platform engineering market are Amazon Web Services (AWS), Microsoft Azure, Google Cloud Platform, IBM Cloud, Salesforce, Oracle, SAP, Red Hat, Cisco Systems, Intel Corporation.

Below figure depicts the market share of major companies in 2022:

Source: We Market Research

Market Segments

By Type

·         Cloud Platforms

·         Mobile Platforms

·         Web Platforms

·         IoT (Internet of Things) Platforms

·         Blockchain Platforms

·         Data Analytics Platforms

By Application

·         Customer Relationship Management (CRM)

·         Enterprise Resource Planning (ERP)

·         Supply Chain Management

·         Content Management

·         Data Management and Analytics

·         E-commerce and Marketplace Platforms

·         Industrial Automation and Control

·         Smart Cities and Infrastructure

By End Use

·         Healthcare

·         Financial Services

·         Retail and E-commerce

·         Manufacturing

·         Transportation and Logistics

·         Energy and Utilities

·         Government

·         Telecommunications

·         Media and Entertainment

·         Education

Use Cases

·         Customer Engagement Platforms

·         IoT and Industrial Platforms

·         Fintech and Payment Platforms

·         Social Media and Networking Platforms

·         Gaming and Entertainment Platforms

·         Healthcare and Telemedicine Platforms

·         Smart City Platforms