Worldwide end-user spending on public cloud services is projected to grow 20.4 percent in 2024, reaching a total of $675.4 billion.
According to the latest industry forecast from Gartner, Inc., this is up from $561 billion in 2023. This robust growth is being driven by the increasing adoption of generative AI (GenAI) technologies as well as continued investments in application modernization initiatives across organizations.
Drivers of cloud spending growth
“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,” said Sid Nag, vice president analyst at Gartner. “Because of this continued growth, we expect public cloud end-user spending to eclipse the one trillion dollar mark before the end of this decade.”
Cloud segment growth projections
All segments of the cloud market are projected to see growth in 2024. Infrastructure-as-a-Service (IaaS) is forecast to experience the highest end-user spending growth at 25.6 percent, followed by Platform-as-a-Service (PaaS) at 20.6 percent.
“IaaS continues at a robust growth rate that is reflective of the GenAI revolution that is underway,” said 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.”
Read more: Microsoft to commit $2.2 billion investment for cloud, AI services in Malaysia
SaaS remains the largest cloud segment
The cloud infrastructure and platform services segments are experiencing the highest growth in spending, but Software-as-a-Service (SaaS) remains the largest segment of the overall cloud market in terms of end-user spending. SaaS spending is forecast to grow 20 percent to reach a total of $247.2 billion in 2024.
“SaaS spend is driven by applications being modernized by independent software vendors to run in a SaaS-based consumption model,” said Nag. “Organizations 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.”
Cloud adoption in the MENA region
End-user spending on public cloud services in the Middle East and North Africa (MENA) region is projected to grow by 19.8 percent in 2024, reaching a total of $7.3 billion.
“Public cloud spending is expected to surge as companies in the MENA region are moving towards becoming fully digitalized corporations. Additionally, Middle Eastern countries are also looking for a common economic goal of becoming technology and data centric. Organizations are using cloud as an enabler of technologies such as AI and business analytics to enhance the capabilities,” said Shailendra Upadhyay, senior principal analyst at Gartner.
For more technology news, click here.
