Wednesday, June 19, 2024
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Gartner Forecasts Worldwide Public Cloud End-User Spending to Surpass $675 Billion in 2024

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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, Inc. This growth is being driven by generative AI (GenAI) and application modernization.

Mr. Sid Nag, Vice President Analyst at Gartner.
Mr. Sid Nag, Vice President Analyst at Gartner.

“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 Mr. 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.”

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% (see Table 1).

Table 1. Worldwide Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

 2023 Spending2023 Growth (%)2024 Spending2024 Growth (%)2025 Spending2025 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 Market561,10417.3675,43320.4824,76322.1

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,” 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.”

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 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.”

In India, end-user spending on public cloud services is forecast to grow 30%, to total $11.7 billion in 2024. IaaS is forecast to record the highest end-user spending growth in 2024 (see Table 2).

Table 2. India Public Cloud Services End-User Spending Forecast (Millions of U.S. Dollars)

 2023 Spending2023 Growth (%)2024 Spending2024 Growth (%)2025 Spending2025 Growth (%)
Cloud Application Infrastructure Services (PaaS)    2,942    18.8    3,737    27    4,880    30.6
Cloud Application Services (SaaS)2,46518.53,135  27.2  3,896  24.3
Cloud Business Process Services (BPaaS)4502.2503    11.7    603    19.8
Cloud Desktop-as-a-Service (DaaS)69-0.978  11.9  84  7.9
Cloud System Infrastructure Services (IaaS)3,10528.84,292    38.2    6,252    45.7
Total Market9,03320.811,7453015,71533.8

Note: Totals may not add up due to rounding.

Source: Gartner (May 2024)

 Mr. Shailendra Upadhyay, Senior Principal Analyst at Gartner.
Mr. Shailendra Upadhyay, Senior Principal Analyst at Gartner.

“In 2024, IaaS spending in India is forecast to grow 38.2%, totalling to $4.2 billion. This is mainly due to companies looking for cost-effective and scalable compute capabilities to support strategic multi-year initiatives such as Digital India,” said Mr. Shailendra Upadhyay, Senior Principal Analyst at Gartner.

Furthermore, PaaS spending in India is projected to grow 27% in 2024. “PaaS spend is growing as organizations seek to digitize and automate legacy IT systems to improve data and analytics capabilities and enable early experimentation with GenAI. Globally, demand for sovereign cloud has continued to increase driving investment in distributed cloud capabilities as a way to support regulatory compliance and reduce connectivity or latency issues,” said Upadhyay.

Covered By: NCN MAGAZINE / Gartner

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