Worldwide end-user spending on public cloud services is forecast to grow 20,4% to total $678,8-billion in 2024, up from $563,6-billion in 2023, according to the latest forecast from Gartner.
“Cloud has become essentially indispensable,” says 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, organisations deploying generative AI (GenAI) services will look to the public cloud, given the scale of the infrastructure required,” says Nag. “However, to deploy GenAI effectively, these organisations will require cloud providers to address non-technical 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.”
All segments of the cloud market are expected see growth in 2024. Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth in 2024 at 26,6%, followed by platform-as-a-service (PaaS) at 21,5%.
Worldwide Public Cloud Services End-User Spending Forecast (Millions of US Dollars)
| 2022 | 2023 | 2024 | |
| Cloud Application Infrastructure Services (PaaS) | 119,579 | 145,320 | 176,493 |
| Cloud Application Services (SaaS) | 174,416 | 205,221 | 243,991 |
| Cloud Business Process Services (BPaaS) | 61,557 | 66,339 | 72,923 |
| Cloud Desktop-as-a-Service (DaaS) | 2,430 | 2,784 | 3,161 |
| Cloud System Infrastructure Services (IaaS) | 120,333 | 143,927 | 182,222 |
| Total Market | 478,315 | 563,592 | 678,790 |
BPaaS = business process as a service; IaaS = infrastructure as a service; PaaS = platform as a service; SaaS = software as a service
Note: Totals may not add up due to rounding.
Source: Gartner (November 2023)
Another key trend driving cloud spending is the continued rise of industry cloud platforms.
Industry cloud platforms address industry-relevant business outcomes by combining underlying software-as-a-service (SaaS), PaaS and IaaS services into a whole-product offering with composable capabilities.
Gartner predicts that by 2027, more than 70% of enterprises will use industry cloud platforms to accelerate their business initiatives, up from less than 15% in 2023.
“GenAI adoption will also support the growth in industry cloud platforms,” says Nag. “GenAI models that are applicable across diverse industry verticals might require significant customisation, 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.”