According to the latest forecast by Gartner, global spending by end-users on public cloud services is projected to increase by 20.4 percent and reach a total of $678.8 billion in 2024. This represents a significant growth from the $563.6 billion spent in 2023.
“Cloud has become essentially indispensable,” said Sid Nag, vice president analyst at Gartner. “However, that doesn’t mean cloud innovation can stop or even slow. The tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models.”
“For example, organizations deploying generative AI (GenAI) services will look to the public cloud, given the scale of the infrastructure required,” said Nag. “However, to deploy GenAI effectively, these organizations will require cloud providers to address nontechnical issues related to cost, economics, sovereignty, privacy and sustainability. Hyperscalers that support these needs will be able to capture a brand-new revenue opportunity as GenAI adoption grows.”
In 2024, all segments of the cloud market are anticipated to witness growth. According to projections, Infrastructure-as-a-Service (IaaS) is expected to have the highest growth rate in end-user spending, with a forecasted increase of 26.6 percent. This will be followed by Platform-as-a-Service (PaaS), which is projected to experience a growth rate of 21.5 percent.
Read more: Gartner says worldwide IaaS public cloud services revenue grew 30 percent in 2022
Industry-specific business objectives
The ongoing growth of industry cloud platforms is identified as a significant factor contributing to increased cloud spending. These platforms cater to industry-specific business objectives by integrating software-as-a-service (SaaS), platform-as-a-service (PaaS), and infrastructure-as-a-service (IaaS) services into comprehensive and adaptable offerings. Gartner’s forecast indicates that by 2027, over 70 percent of enterprises will leverage industry cloud platforms to expedite their business initiatives, a substantial increase from the less than 15 percent adoption rate recorded in 2023.
“GenAI adoption will also support the growth in industry cloud platforms,” said Nag. “GenAI models that are applicable across diverse industry verticals might require significant customization, affecting scalability and cost-effectiveness. Public cloud providers can position themselves as partners in the responsible and tailored adoption of GenAI by building on the same approaches applied to industry clouds, sovereign clouds and distributed clouds.”
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