Cloud spending will reach a whopping $723 billion by 2025, thanks in part to explosive demand for AI assets
- Gartner predicts an acceleration of growth in 2025 with an increase of 21.4%
- Cloud application services will account for approximately $300 billion in revenue
- In contrast, desktop-as-a-service, once a promising growth area, will barely reach $4 billion
New research has claimed that spending on cloud services will reach a new high as demand for AI continues to grow.
A Gartner report predicts that global end-user spending on public cloud services will reach $723.420 billion in 2025, a growth rate of 21.4%, up from $595.652 billion in 2024, reflecting the growing dependence on cloud services across industries emphasized.
Cloud Application Services (SaaS) remains an important segment, with spending expected to grow from $250.8 billion in 2024 to $299.1 billion in 2025. Similarly, Cloud System Infrastructure Services (IaaS) spending is expected to reaching $211.9 billion by 2025, while Platform-as-a-Service (PaaS) will rise to $208.6 billion. In contrast, desktop-as-a-service (DaaS), once seen as a promising growth area, is now forecast to contribute just $3.85 billion to the total by 2025, reflecting its limited adoption and marginal share of the cloud market .
Predicting cloud infrastructure spending is difficult
When analyzing the market dynamics and noting the fractional change in monthly cloud spending figures, The next platform commented: “The cloud infrastructure market is now so big that it is very difficult to change it drastically. But given that people can disable server, storage and networking capacity as easily as they can enable it, predicting how much money the world will spend on cloud infrastructure can be tricky.”
TNP also noted a trend whereby “more than two-thirds and almost three-quarters of raw infrastructure and platform services are sold together,” now called Cloud Infrastructure and Platform Services (CIPS). In 2022, CIPS represented 70% of total IaaS and PaaS revenues, and this share is expected to grow to 71.6% by 2025. The Next Platform concluded: “In the long term, this is what ‘cloud’ will mean. .. Not only do you choose its preferences for servers and storage and networking, but you also choose its platform.”
The figures show an increase from a separate Gartner report from November 2024, which said spending on public cloud services would reach $723.421 billion, with Gartner vice president analyst Sid Nag noting at the time: “Usage of AI technologies in IT and business operations continues to accelerate the role of cloud computing in supporting business operations and results. Cloud use cases continue to expand with an increasing focus on distributed, hybrid, cloud-native and multi-cloud environments supported by a cross-cloud framework.”
Hybrid cloud environments are expected to become the norm in the coming years. Gartner predicts that 90% of organizations will embrace this approach by 2027.