The worldwide infrastructure as a service (IaaS) market grew 22,5% in 2024 to $171,8-billion, according to Gartner, with Amazon retaining the number one position, followed by Microsoft, Google, Alibaba, and Huawei.
“As enterprises continue to seek greater flexibility, improved resilience and optimised performance, there is sustained demand for cloud migration and modernisation services,” says Hardeep Singh, principal analyst at Gartner. “Enterprises want to transform their IT infrastructure by leveraging multiple platforms for AI and prioritising modernisation by migrating existing workloads to the cloud. They are also deploying cloud-native applications across diverse environments.”
This trend is further fueled by the demand for flexibility with data residency and sovereignty as enterprises seek to gradually transition to the cloud while keeping control over their data and operations.
“Cloud providers are investing heavily in AI infrastructure and capabilities to become leaders in the rapidly evolving AI-optimised IaaS market,” says Singh. “They expect that AI will become a much larger revenue contributor in the future, even though it currently remains a relatively small slice of their overall revenue within the IaaS space.
“Emerging AI-optimised IaaS offerings from non-hyperscalers, or GPU as a service (GPUaaS) providers, though still nascent have also played a key role in addressing immediate capacity requirements by offering flexible, high-performance compute on demand.”
In 2024, the top five IaaS providers accounted for 82,1% of the market. Amazon continued to lead the worldwide IaaS market with revenue of $64,8-billion and 37,7% market share, followed by Microsoft with 23,9% market share. Google, Alibaba Group, and Huawei maintained their respective positions year-over-year.