Worldwide end-user spending on public cloud services is forecast to total $723.4 billion in 2025, up from $595.7 billion in 2024, according to the latest forecast from Gartner, Inc.
“The use of AI technologies in IT and business operations is unabatedly accelerating the role of cloud computing in supporting business operations and outcomes,” said Sid Nag, Vice President Analyst at Gartner. “Cloud use cases continue to expand with increasing focus on distributed, hybrid, cloud-native, and multicloud environments supported by a cross-cloud framework, making the public cloud services market achieve a 21.5% growth in 2025.”
Gartner predicts that 90% of organisations will adopt a hybrid cloud approach through 2027, and the most urgent GenAI challenge necessary to address over the next year will be data synchronisation across the hybrid cloud environment.
Overall, all segments of the cloud market are expected to record a double-digit growth rate in 2025 highlighting how I&O leaders are pressured to effectively integrate I&O into their GenAI strategies and prepare for running AI and GenAI infrastructure at the edge.
IaaS and PaaS Spending Dynamics
The growth of industry and vertical specific GenAI models which are curated, private and secure, and that require advanced training, inferencing and fine tuning, will continue to drive the growth of public cloud services spending globally.
In 2025, organisations will increasingly be attracted to the efficiencies of cloud infrastructure and platform services (CIPS) offerings. Gartner defines the CIPS market as a full-featured platform in which IaaS and PaaS capabilities are delivered as integrated cloud services.
“Organisations are choosing CIPS because workloads of today are complex, and organisations are seeking integrated platforms to simplify development, deployment and operations. Organisations deploying a multicloud adoption model, which is still recording growth, are also driving spend on CIPS,” said Nag.
Furthermore, cross cloud integration framework (CCIF) that makes multicloud a reality will be a key driver of the CIPS adoption model. For example, organisations will demand cross cloud federated GenAI capabilities to service advanced AI workloads and use cases.
Gartner expects end-user spending on CIPS will grow 24.2% in 2025 to reach $301 billion. In 2025, CIPS offerings are projected to account for 72% of IT spending on IaaS and PaaS, up from 70% in 2022.
