Cloud

Users will drop nearly $700 billion on public cloud next year, Gartner predicts

For many firms, spend on public cloud is mandatory, Gartner analysts argue.
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End users will spend just shy of $679 billion on public cloud services worldwide in 2024, continuing a trend of double-digit year over year growth, according to a recent Gartner forecast.

Gartner researchers predicted 20.4% growth worldwide from 2023 to 2024, in part based on surging interest in compute-heavy generative AI applications and industry cloud platforms. While the report predicts end user spending growth in every category of the public cloud market, it lists the fastest growing categories as infrastructure-as-a-service (26.6% growth) and platform-as-a-service (21.5%).

Spending by end user enterprises on public cloud, which runs on shared infrastructure, has outpaced private cloud spending, according to a report earlier this year from IT research firm IDC.

“Cloud has become essentially indispensable,” Gartner VP Analyst Sid Nag wrote in the report, adding that cloud providers will have to innovate as “cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models.”

Gartner also predicted that “more than 70% of enterprises will use industry cloud platforms,” or collections of cloud applications consolidated for use in specific industries, by 2027. Less than 15% of enterprises use such platforms today, according to Gartner’s data.

“GenAI adoption will also support the growth in industry cloud platforms,” Nag told IT Brew via email. “GenAI models that are applicable across diverse industry verticals might require significant customization, 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.”

The market research firm is far from alone in predicting continued expansion in the cloud business.

Synergy Research Group recently issued a report predicting that 19 of the largest hyperscale data operators will nearly triple their capacity by 2029 in order to meet demand, with the vast majority of the expanded capacity coming from the construction of new facilities rather than retrofitting of old ones. IDC has predicted worldwide spend on the public cloud to be $1.35 trillion in 2027.

As IT Pro observed, at the beginning of 2023, many analysts predicted a slowdown in cloud spend, citing signs of an imminent recession and reduced hyperscale growth at the tail end of 2022. However, no global recession happened, and Nag told the site that continued cloud investment isn’t optional for many firms.

“Cloud continues to be the disruptor in an organization’s technology and business operational models,” Nag wrote in his emailed statement. “However, the role of cloud is shifting rapidly from technology disruptor to a capability enabler to an innovation facilitator and eventually a business disruptor.”

“So in essence organizations absolutely cannot afford to neglect spending in this area,” he added.

Top insights for IT pros

From cybersecurity and big data to cloud computing, IT Brew covers the latest trends shaping business tech in our 4x weekly newsletter, virtual events with industry experts, and digital guides.