Gartner Forecasts Robust Growth in Worldwide Public Cloud Spending

Gartner’s latest forecast (through the end of the third quarter of 2023) predicts a substantial surge in worldwide end-user spending on public cloud services, reaching $678.8 billion in 2024, up from $563.6 billion in 2023. The indispensable role of cloud services is clear, with business outcomes now shaping cloud models rather than the other way around. That’s according to its “Forecast: Public Cloud Services, Worldwide, 2021-2027, 3Q23 Update.”

Cloud innovation amidst rapid growth

The forecast highlights a 20.4% growth in worldwide end-user spending on public cloud services in 2024, emphasizing the indispensable nature of cloud technology. However, the evolution of cloud models is far from slowing down, with emerging technologies like generative AI (GenAI) driving innovation. Due to the infrastructure’s scale, organizations deploying GenAI services are expected to turn to the public cloud. This presents a new revenue opportunity for hyperscalers addressing non-technical issues such as cost, economics, sovereignty, privacy, and sustainability.

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Segment-wise growth and industry cloud platforms

All segments of the cloud market are poised for growth in 2024, with Infrastructure-as-a-service (IaaS) leading at 26.6% end-user spending growth, followed by platform-as-a-service (PaaS) at 21.5%. An additional key trend contributing to increased cloud spending is the rise of industry cloud platforms, which combine SaaS, PaaS, and IaaS services to provide tailored offerings with composable capabilities. Gartner predicts that over 70% of enterprises will use industry cloud platforms by 2027, up from less than 15% in 2023, with GenAI adoption playing a pivotal role in supporting this growth.

The forecast underscores the dynamic landscape of cloud services, driven by the evolving needs of businesses and the rapid adoption of transformative technologies like GenAI. As cloud models continue to adapt to business outcomes, the market is poised for substantial growth across various segments, with industry cloud platforms playing a pivotal role in shaping the future of cloud computing.