Dive Brief:
- Gartner expects end-user cloud spending to increase 21.5% globally to $723 billion in 2025, according to a Tuesday report. The market will reach nearly $600 billion this year, the analyst firm said.
- Cloud-based application and software services continue to be the largest spend segment, the analysis shows. Spending on SaaS applications will approach $300 billion next year, up from just over $250 billion in 2024. Infrastructure and platform services, the second and third largest segments, are the fastest growing markets with expected year-over-year spending increases of 25% and 22% respectively.
- Enterprise AI adoption is helping to drive cloud growth, according to Sid Nag, VP analyst at Gartner. “The use of AI technologies in IT and business operations is unabatedly accelerating the role of cloud computing in supporting business operations and outcomes,” he said in the report.
Dive Insight:
Cloud infrastructure delivered large language models to the enterprise, and hyperscaler platforms now serve as marketplaces for a growing number of generative AI-powered applications.
Combined, cloud infrastructure and platform services — a segment Gartner calls CIPS — will comprise the largest category of enterprise cloud spend in 2025, increasing by 24% to over $300 billion, according to the forecast.
“Organizations are choosing CIPS because workloads of today are complex, and organizations are seeking integrated platforms to simplify development, deployment and operations,” Nag said. “Organizations deploying a multicloud adoption model, which is still recording growth, are also driving spend on CIPS.”
As enterprises modernize data operations and adopt cloud-based generative AI tools tailored to industry verticals, hybrid ecosystems that integrate on-premises systems with hyperscaler infrastructure will also expand. Gartner expects 90% of organizations to have hybrid cloud deployments by 2027.
