Spending on cloud infrastructure could even decline by 2025
- Total cloud spending will rise 21.4% to $723.4 billion by 2025, claims Gartner
- However, the dataset no longer covers some important areas
- The performance for 2024 is lower than expected
New data from Gartner shows that global total cloud spending will continue to grow through 2025, but if you read between the lines, the certainty is more questionable in some areas.
As 2024 draws to a close, Gartner predicts growth in four key categories: cloud application infrastructure services (Paas), cloud application services (SaaS), cloud desktop-as-a-service (Daas), and cloud system infrastructure services (Iaas). – will stabilize at 19.2%, slightly below the 19.9% of 2023.
That said, there are some omissions in the data that suggest not all areas of cloud spending will be so successful.
Cloud spending may slow down
Total cloud spending is forecast to rise dramatically, from $595.7 billion in 2024 to $723.4 billion in 2025, marking a healthy 21.4% increase – more than what we saw in the last two years seen.
However, the cloud market is so large that accurate forecasting can be extremely difficult, and even small trends can have a significant knock-on effect.
Key to the concern is that Gartner has slowly removed categories from its predictions. In 2023, the company discontinued cloud management and security services, and this year removed Business Process as a Service (BPaaS). Neither seems to fit into any of the other categories.
Of the remaining four categories, DaaS is predicted to see the smallest change by 2025, up just 0.5%. This year and last year the sector grew by 0.6%. It may only be a tenth of a percentage point, but in terms of change, 0.5% is a decrease of 16.7% from 0.6%.
The figures also show that spending on IaaS compute, storage and network capacity will be lower than expected earlier this year.
The news comes as many companies are considering moving back from the cloud to on-premises infrastructure. Cloud used to be a cheaper and more flexible alternative, but the margin has fallen significantly.
Individual, Channels Senior director Rachel Brindley said companies “must be careful to avoid overspending or inefficient allocation of resources.”
Brindley added: “Ensuring the sustainability of these investments over time will be critical to maintaining long-term financial health and competitive advantage.”