Worldwide end-user spending on public cloud services is forecast to grow 20.4% and reach $678.8 billion in 2024, up from $563.6 billion in 2023, according to research and consulting firm Gartner.
All segments of the cloud market are expected to witness growth in 2024. According to Gartner, infrastructure-as-a-service is forecast to experience the highest end-user spending growth in 2024 at 26.6%, reaching $182.2 billion. This is followed by platform-as-a-service, which is expected to grow at 21.5% to reach $176.4 billion. Cloud application services (software-as-a-service) are forecast to reach $243.9 billion in 2024, from $205.2 billion in 2023.
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Gartner noted that while cloud has become essentially indispensable, cloud innovation cannot stop or slow. “The tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models,” said Sid Nag, vice president analyst at Gartner.
“For example, organisations deploying generative AI services will look to the public cloud. However, to deploy GenAI effectively, these organisations 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,” remarked Nag.
According to Gartner, 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 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.
Generative AI adoption will also support the growth in industry cloud platforms, and generative AI 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,” Nag suggested.
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