From a geographic point of view, the United States will be the largest public cloud services market with spending expected to top $432 billion in 2024.
Worldwide spending on public cloud services is forecast to reach $805 billion in 2024 and double in size by 2028, according to the latest update to the International Data Corporation (IDC). Although annual spending growth is expected to slow slightly over the 2024-2028 forecast period, the market is forecast to achieve a five-year compound annual growth rate (CAGR) of 19.4 percent.
Of the 28 industries covered in the Spending Guide, the three largest – Banking, Software and Information Services, and Retail – will together represent $190 billion in public cloud services spending in 2024. The next five largest industries – Telecommunications, Media and Entertainment, Capital Markets, Healthcare Provider, and Professional and Personal Services – will each account for more than 5% of worldwide spending. The industries that will see the fastest spending growth through 2028 are Capital Markets, Life Sciences, and Insurance (all around 23% CAGR). In fact, every industry except Consumer will deliver double-digit CAGRs over the 2023-2028 forecast period.
"The rapid advancements in artificial intelligence are significantly driving the surge in cloud spending. With organizations increasingly building, testing, and deploying AI platforms, the growing interdependence between AI innovation and cloud infrastructure is positioning cloud services as the backbone of AI development and deployment," said Andrea Minonne, research manager, Data & Analytics at IDC. "AI platforms will be the fastest growing technology in the years to come, and in the long run industries like insurance, healthcare payer, and healthcare provider will accelerate cloud-based AI platforms investments the fastest."
Software as a Service (SaaS) – Applications will be the largest category of cloud computing, capturing more than 40% of all public cloud spending in 2024. The leading SaaS applications will be enterprise resource management (ERM) and customer relationship management (CRM), followed by content workflow and management applications and collaborative applications. The SaaS – Applications category will also see slower spending growth than the overall market with a five-year CAGR of 16.5 percent.
Platform as a Service (PaaS) and Infrastructure as a Service (IaaS) will each deliver nearly 20 percent of all public cloud spending in 2024, separated by less than $1 billion. PaaS will be the fastest growing category, led by Data Management Software throughout the forecast while Artificial Intelligence Platforms will experience the fastest growth with a five-year CAGR of 51.1 percent. IaaS spending, comprised of compute, storage, and networking devices, will be the second fastest growing category.
From a geographic point of view, the United States will be the largest public cloud services market with spending expected to top $432 billion in 2024. Western Europe will be the second largest market in 2024 with spending approaching $167 billion, followed by Asia/Pacific (excluding Japan and China) (APeJC) at more than $51 billion. Five geographic regions – APeJC, Central & Eastern Europe, Latin America, Middle East & Africa, and Western Europe – will have five-year CAGRs greater than 20 percent.
