Gartner Predicts $301 Billion for Cloud Infrastructure in 2025

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 organizations will adopt a hybrid cloud approach through 2027, and the most urgent GenAI challenge necessary to address over the next year will be data synchronization 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 (see Table 1).

Table 1. Worldwide Public Cloud Services End-User Spending Forecast, 2024-2025 (Millions of U.S. Dollars)

Note: Totals may not add up due to rounding.

Source: Gartner (November 2024)

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, organizations 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.

“Organizations are choosing CIPS because workloads of today are complex, and organizations are seeking integrated platforms to simplify development, deployment and operations. Organizations deploying a multicoud 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, organizations 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.