IaaS public cloud market grows 22.5% to $171.8b in 2024

• Surge propelled by organisations seeking enhanced operational agility, greater resilience, and optimised performance.
• Emerging players—especially those offering AI-optimised IaaS or GPU as a Service —are now catering to businesses’ immediate needs for scalable, high-performance computing.

The infrastructure as a service (IaaS) sector experienced remarkable expansion in 2024, posting a 22.5% increase and achieving a total market value of $171.8 billion, as reported by the research firm Gartner, Inc.

Amazon maintained its leading position in this space, with Microsoft, Google, Alibaba, and Huawei rounding out the top five. Collectively, these five giants captured a commanding 82.1 per cent share of the world market.

According to Hardeep Singh, Principal Analyst at Gartner, the sustained surge in cloud adoption is being propelled by organisations seeking enhanced operational agility, greater resilience, and optimised performance.

Modernisation

“To meet these goals, businesses are intensifying efforts to migrate and modernise their IT estates, turning to multiple cloud platforms, especially as artificial intelligence becomes integral to their strategies. Modernisation is often driven by the transition of existing workloads to the cloud and the wider deployment of cloud-native applications across a variety of settings,” said Singh.

Another persistent force shaping the market is the heightened requirement for flexibility regarding data residency and sovereignty. Enterprises are keen on gradually adopting cloud technology while ensuring they retain local control over sensitive information and operational processes.

AI investments

With the global focus shifting to AI, cloud providers are pouring significant investment into developing advanced AI infrastructure as they compete for future leadership in this rapidly advancing field.

Singh noted, “Though AI-related services currently represent a modest proportion of total IaaS revenue, cloud vendors expect AI to play a much larger role in the near future.”

Emerging players—especially those offering AI-optimised IaaS or GPU as a Service (GPUaaS)—are now catering to businesses’ immediate needs for scalable, high-performance computing.

While these competitors may still constitute a relatively young segment, they are making their presence felt by enabling on-demand, flexible compute power tailored for the era of artificial intelligence.