Worldwide end user spending on public cloud services is forecast to grow 20,4% to total $675,4-billion in 2024 – up from $561-billion in 2023 – according to the latest forecast from Gartner which says this growth is being driven by generative AI (GenAI) and application modernisation.
“The continued growth we expect to see in public cloud spending can be largely attributed to GenAI due to the continued creation of general-purpose foundation models and the ramp up to delivering GenAI-enabled applications at scale,” says Sid Nag, vice-president analyst at Gartner. “Because of this continued growth, we expect public cloud end user spending to eclipse the $1-trillion mark before the end of this decade.”
All segments of the cloud market are expected to see growth in 2024. Infrastructure-as-a-service (IaaS) is forecast to experience the highest end user spending growth at 25,6%, followed by platform-as-a-service (PaaS) at 20,6%.
Worldwide Public Cloud Services End-User Spending Forecast (Millions of US Dollars)
| 2023 Spending | 2023
Growth (%) |
2024 Spending | 2024
Growth (%) |
2025 Spending | 2025
Growth (%) |
|
| Cloud Application Infrastructure Services (PaaS) |
142,934 |
19.5 |
172,449 |
20.6 |
211,589 |
22.7 |
| Cloud Application Services (SaaS) |
205,998 |
18.1 |
247,203 |
20.0 |
295,083 |
19.4 |
| Cloud Business Process Services (BPaaS) |
66,162 |
7.5 |
72,675 |
9.8 |
82,262 |
13.2 |
| Cloud Desktop-as-a-Service (DaaS) |
2,708 |
11.4 |
3,062 |
13.1 |
3,437 |
12.3 |
| Cloud System Infrastructure Services (IaaS) |
143,302 |
19.1 |
180,044 |
25.6 |
232,391 |
29.1 |
| Total Market | 561,104 | 17.3 | 675,433 | 20.4 | 824,763 | 22.1 |
Note: Totals may not add up due to rounding.
Source: Gartner (May 2024)
“IaaS continues at a robust growth rate that is reflective of the GenAI revolution that is underway,” says Nag. “The need for infrastructure to undertake AI model training, inferencing and fine-tuning has only been growing and will continue to grow exponentially and have a direct effect on IaaS consumption.”
While cloud infrastructure and platform services are driving the highest spending growth, SaaS remains the largest segment of the cloud market in end user spending. SaaS spending is projected to grow 20% to total $247,2-billion in 2024.
“SaaS spend is driven by applications being modernised by independent software vendors to run in a SaaS-based consumption model,” says Nag. “Organisations continue to increase their usage of cloud for specific use cases such as AI, machine learning, Internet of Things, and big data which is driving this SaaS growth.”