The majority of Software-as-a-Service (SaaS) cloud providers operate their platforms and deliver services through major hyperscale cloud infrastructure providers, including Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). These hyperscalers collectively dominate the global cloud infrastructure market, controlling an estimated 65% to 68% of the total market share, with variations depending on the specific analysis period.

SaaS vendors frequently select hyperscale providers due to their unparalleled scalability, cost efficiency, and extensive global reach. Applications hosted on hyperscale infrastructures benefit significantly from economies of scale, eliminating substantial upfront capital expenditures traditionally associated with on-premises software deployments. Instead, these applications capitalize on flexible, usage-based subscription models. This paradigm shift has led numerous SaaS organizations to migrate or re-architect their platforms specifically for hyperscale cloud environments.

Although precise data quantifying the proportion of SaaS providers utilizing hyperscale platforms remains limited, the overwhelming dominance of these providers in the cloud infrastructure market strongly indicates substantial reliance by SaaS vendors. AWS alone commands approximately 31% to 33% of the market share, followed by Microsoft Azure with 20% to 25%, and Google Cloud with 10% to 11%. Collectively, these three hyperscale providers constitute the foundation of the global cloud ecosystem, supporting a significant portion of SaaS deployments worldwide.

Considering these market dynamics, it is reasonable to infer that a considerable majority of SaaS vendors—potentially exceeding two-thirds—operate their services on one of these dominant hyperscale cloud platforms.

In today's rapidly evolving digital economy, modern organizations are embracing a SaaS-first (Software as a Service) policy to stay agile, innovative, and competitive. By prioritizing cloud-based software solutions, companies are not only optimizing operational efficiency but also creating robust opportunities for staff upskilling and talent attraction. SaaS platforms provide employees with access to cutting-edge tools, real-time collaboration systems, and on-demand learning resources, fostering a culture of continuous growth and digital fluency. With intuitive interfaces and regular updates, SaaS tools reduce the barriers to technology adoption, empowering employees to enhance their skill sets without prolonged onboarding or extensive technical training.

A SaaS-first policy also significantly contributes to employee attraction and retention. Modern job seekers are increasingly drawn to workplaces that offer flexibility, remote-friendly tools, and access to advanced digital technologies. SaaS solutions enable seamless collaboration across geographically distributed teams, catering to hybrid and remote work models that have become the norm in the post-pandemic world. Moreover, SaaS platforms often integrate with Learning Management Systems (LMS), enabling companies to deliver personalized training and career development programs. This not only equips employees with the skills needed to excel in their current roles but also prepares them for future challenges, creating a dynamic and resilient workforce.

Furthermore, organizations that adopt SaaS-first policies benefit from scalable and cost-effective talent strategies. By leveraging data analytics and AI-powered insights embedded in many SaaS tools, employers can identify skill gaps, predict workforce trends, and create targeted training programs. This strategic approach reduces turnover rates and ensures that teams are consistently aligned with business objectives. In turn, prospective employees perceive these organizations as forward-thinking and investment-oriented workplaces, where professional growth is not just encouraged but systematically enabled.

Cloud service providers rely on a standardized set of contract terms of use to efficiently operate at scale and serve a global community of users. These terms establish a consistent legal and operational framework that governs the relationship between the provider and its customers, regardless of geographic location or customer size. By using uniform terms, cloud providers can streamline their operations, reduce administrative overhead, and ensure predictable service delivery across diverse markets. Key aspects typically include provisions for data privacy, service availability, liability limitations, and acceptable usage policies. This standardized approach allows providers to manage risks, enforce security and compliance standards, and offer scalable services without the need to renegotiate terms for each individual customer. Additionally, by minimizing operational and legal complexities through standardized agreements, cloud providers can achieve economies of scale, enabling them to maintain competitive and consistent pricing across their global user base. Common terms also ensure transparency and set clear expectations, building trust with users worldwide while enabling providers to focus on innovation and infrastructure reliability rather than managing complex, customized agreements. Ultimately, these standardized contract terms are a foundational element that allows cloud services to be agile, reliable, and universally accessible.

In procuring cloud service offerings, the Government of Canada operates within a global marketplace. However, it is understood that the Government of Canada has specific requirements to align cloud service agreements with its procurement policies, regulations, and international trade obligations to safeguard the interests of Canadian taxpayers. These additional terms are essential to ensure compliance with national standards for data sovereignty, privacy, security, and accountability in public sector operations.

Recognizing this, it is recommended that the Government of Canada enable and allow the Cloud Service Provider to name and assign an authorized agent to manage the supplemental contract terms that are unique to the Government of Canada. This approach would streamline negotiations and ongoing contract management, ensuring that the specialized requirements of the Government are addressed efficiently without compromising the scalability and operational benefits of standardized global terms and standardized global cloud services. Such a mechanism would also foster clearer communication, improved accountability, and a collaborative partnership between the Cloud Service Provider and the Government of Canada, ultimately serving the public interest more effectively.

The CCCS Medium Cloud Security Control profile (formerly PBMM) is the most common security requirement for cloud providers working with the Government of Canada. However, the entanglement of procurement and security profile assessment processes often creates significant barriers. The cost and time required for cloud providers to receive an assessment for higher security classifications, combined with the need for departmental sponsorship to complete these security assessments, pose substantial challenges. These hurdles deter many cloud providers from pursuing supply arrangements, limiting competition and innovation within the cloud procurement ecosystem. Addressing these structural inefficiencies is essential to fostering a more inclusive and effective cloud marketplace for government services.