Worldwide spending on public cloud services is projected to witness a robust growth of 20.4 percent, reaching a staggering $678.8 billion in 2024, as per the latest forecast by Gartner.
This surge follows the $563.6 billion spent in 2023, highlighting the escalating reliance on cloud technologies across various industries, the report said.
One driving force behind the surge in cloud spending is the adoption of generative AI (GenAI) services. Organizations deploying GenAI are turning to public cloud services due to the massive scale of infrastructure required.
Gartner’s Vice President Analyst, Sid Nag, emphasized the importance of addressing non-technical issues such as cost, economics, sovereignty, privacy, and sustainability for effective GenAI deployment. Cloud providers capable of meeting these diverse needs are poised to seize a new revenue opportunity as GenAI adoption expands.
All segments of the cloud market are anticipated to experience growth in 2024, with Infrastructure-as-a-service (IaaS) leading the way with a forecasted end-user spending growth of 26.6 percent, followed closely by platform-as-a-service (PaaS) at 21.5 percent.
A notable trend influencing cloud spending is the rising prominence of industry cloud platforms. These platforms integrate software-as-a-service (SaaS), PaaS, and IaaS services to deliver comprehensive solutions tailored to specific industries. Gartner predicts that by 2027, over 70 percent of enterprises will leverage industry cloud platforms to accelerate business initiatives, a significant increase from less than 15 percent in 2023.
There is synergy between GenAI adoption and the growth of industry cloud platforms. Customizable GenAI models applicable across diverse industries may require significant tailoring, impacting scalability and cost-effectiveness. Public cloud providers, by aligning with the approaches applied to industry clouds, sovereign clouds, and distributed clouds, can position themselves as vital partners in the responsible and tailored adoption of GenAI.
As cloud spending continues to rise, the landscape of technology adoption and innovation is undergoing a transformative shift, with businesses and industries globally recognizing the strategic importance of cloud services in driving their future success.