As of 2024, surveyed technical executives, managers, and practitioners of cloud technologies from around the world indicated that the biggest challenges of using cloud computing technology within their organizations were related to managing cloud spend. Around 84 percent of respondents found managing cloud spend to be a significant challenge. Other commonly cited challenges included security, governance, and lack of resources/expertise. Cloud computing Cloud computing is a technology that allows organizations of all sizes to take advantage of advanced computing and data storage resources without the need to manage hardware themselves. Large data centers rent space and processing power to numerous clients and provide companies with flexibility and scalability, which can lead to more innovation and increased time to market. The global public cloud computing services market is forecast to bring in revenues of over 678 billion U.S. dollars in 2024. Different cloud computing models There are various cloud computing models in use around the world: public clouds that rent resources to multiple customers through the internet, within-enterprise private clouds, and hybrid clouds that incorporate elements of both. The most commonly employed cloud strategy among enterprises is the hybrid cloud, which accounts for around 82 percent of these organizations as of 2023. Benefits of hybrid cloud strategies include the ability to store and move data and workloads across environments, among others.

In 2024, the global public cloud services market is expected to grow by approximately 20.4 percent, which amounts to about 675 billion U.S. dollars. While the growth of cloud services is relatively rapid, it still represents a small percentage of the global IT services market, which is forecast to cross 1.5 trillion U.S. dollars in 2024. What is a public cloud? A public cloud is a type of cloud computing through which a service provider makes resources, such as applications, virtual machines, or storage capabilities, available to the public via the internet. Clients pay for these resources through a pay-as-you-go model or by subscription. The kind of resources offered vary by cloud provider, which is why organizations that want to migrate their data and workloads to the cloud need to develop a migration strategy beforehand. Public cloud as part of the IT infrastructure solution Today’s clouds used by organizations are usually not deployed as standalone solutions. Rather, they are an integral part of a heterogeneous mix of information technology (IT) network solutions and environments. Ultimately, organizations seek to increase performance and security while lowering costs and ensuring a wider availability of their services and applications by deploying public clouds.

The amount of corporate data stored in the cloud has increased in recent years and is predicted to surpass 60 percent by 2022. This is a significant rise from 2015 when only 30% of corporate data was stored in the cloud. This trend is expected to continue in the future.

What is driving the adoption of cloud technology?

The global public cloud services market is expected to grow by approximately 22 percent in 2023, which equates to around 600 billion U.S. dollars. As businesses expand, their data storage and IT infrastructure needs become increasingly challenging to meet with on-premises storage servers and hardware alone. This growth creates a crucial need for scalability, which can only be efficiently and cost-effectively managed through cloud-based services. Additionally, companies are moving towards cloud technology to enhance their security, reliability, and business agility.

The four major players in the cloud market

Amazon, Google, Microsoft, and Alibaba are known as the big four in cloud technology, controlling over two-thirds of the global cloud market. Amazon Web Services (AWS) has held the majority of the market share for several years, with 32% of the entire market. Microsoft is the closest competitor, growing its market share year on year. Its suite of Office products offered on the cloud for enterprises and consumers worldwide has contributed to their success.

The migration of data to public cloud services continues to evolve, with varying approaches across different data types. A 2024 survey reveals that 37 percent of organizations plan to move all their nonsensitive analytics data to cloud or software as a service (SaaS) platforms. However, sensitive information like corporate financial data remains more firmly rooted on-premises, with 20 percent of organizations keeping it entirely local. Cloud service market growth The cloud services market is experiencing significant expansion, particularly in infrastructure as a service (IaaS). Forecasts indicate a 33 percent growth in IaaS for 2024 compared to 2022, outpacing the overall public cloud services market's expected 20 percent growth. This trend is reflected in the robust performance of major tech companies, with Microsoft leading the pack as the top SaaS company by market capitalization at 3 trillion U.S. dollars in May 2024. Enterprise cloud adoption strategies Organizations are increasingly focused on optimizing their cloud usage, with 60 percent of respondents in 2024 prioritizing cost savings in their cloud initiatives. Simultaneously, 58 percent are committed to migrating more workloads to the cloud, indicating a continued shift towards cloud-based operations. This strategic approach aligns with the diverse cloud adoption patterns observed across different data types, as companies balance the benefits of cloud services with the need for data security and compliance.

As of 2024, over 60 percent of businesses worldwide currently used data warehouse services of public cloud providers. Additionally, 32 percent are experimenting with machine learning/AI, and 17 percent are planning to implement it along with DRaaS and Edge services.

In 2023, enterprise spending on cloud infrastructure services amounted to 270 billion U.S. dollars, a growth of 45 billion U.S. dollars compared to the previous year. The growing market for cloud infrastructure services is driven by organizations' demand for modern networking, storage, and databases solutions. Increased spending on cloud services mainly on platform as a service The platform as a service (PaaS) segment, which includes analytics, database, and internet of things (IoT) has the highest growth rate within the cloud infrastructure services market. The managed private cloud services share declined in comparison. Infrastructure as a service (IaaS) remained relatively steady, with companies like Amazon Web Services and Microsoft dominating the market. However, software as a service (SaaS) is not included, which itself continues to experience growth in end-user spending worldwide. Data center spending declined in 2020 Enterprise spending on data center hardware and software on the other hand began to slightly decline after several years of steady growth. Data center hardware and software encompasses spending on servers, networking, storage, and security software. Because data centers store proprietary or sensitive data, sites are secured by specific software. This includes splitting networks into security zones, for example. Other methods for ensuring security are using tools to scan applications and code before deployment to spot malware or vulnerabilities.

Cloud computing has become an integral part of modern business operations, with public cloud services leading the way. A 2024 survey reveals that 97 percent of businesses worldwide prefer using public cloud services, highlighting the widespread adoption of this cost-effective model. The pay-as-you-go approach allows companies to scale resources as needed, making it an attractive option for organizations of all sizes. Market leaders and revenue growth The cloud computing market is dominated by a few key players, with Amazon Web Services (AWS) maintaining a strong lead. In 2023, AWS held a 48 percent market share in the global infrastructure as a service (IaaS) and platform as a service (PaaS) sectors. Microsoft Azure, Alibaba Cloud, and Google Cloud Platform follow, with the four hyperscalers expected to generate a combined revenue of 167.3 billion U.S. dollars. These companies leverage their global scale, innovative technology, and deep expertise to offer a wide range of services beyond basic cloud computing resources. Regional market forecasts The data center market, closely tied to cloud computing, is poised for significant growth across all regions by 2029. The United States is projected to lead with an estimated revenue of 212.06 billion U.S. dollars, far outpacing other markets such as the United Kingdom, which is forecast to reach 23.76 billion U.S. dollars. This substantial difference underscores the dominance of the U.S. market in the global cloud computing landscape and highlights the potential for continued expansion in other regions.

In late 2024, 17 percent of the enterprise respondents indicated that their organizations spent more than six million and up to 12 million U.S. dollars on public cloud every year. Public cloud spend is remaining strong, as organizations around the world continuously migrate to the cloud as part of their digital transformation plans. Further, organizations increasingly invest in collaboration, remote working technologies, and infrastructure.

In 2024, the survey underscores the continued dominance of data warehouses within cloud storage solutions. With 67 percent of respondents utilizing them, it is evident that businesses value the extensive analytical capabilities and structured data organization that data warehouses provide. This trend signals a persistent need for centralized repositories for data storage and analytics to support strategic decision-making. DBaaS relational databases gain traction The survey reveals a rising preference for database-as-a-service (DBaaS) relational databases. This shift suggests that organizations are increasingly seeking the scalability, ease of maintenance, and reduced administrative overhead that DBaaS solutions provide. People are using DBaaS more because they want to make databases easier and spend more time on important things. Oracle leads this segment among the database management systems providers. PaaS adoption accelerates A key finding from the survey is the marked increase in the adoption of cloud providers' platform-as-a-service (PaaS) offerings. This trend speaks volumes about a broader transformation; companies are decisively moving towards cloud-based platforms for their data needs. PaaS provides convenient building blocks for application development and deployment, accelerating innovation and time-to-market.

The worldwide public cloud computing market continues to grow and is expected to reach an estimated 723.42 billion U.S. dollars in 2025. This encompasses business processes, platform, infrastructure, software, management, security, and advertising services delivered by public cloud services. A public cloud is a cloud deployment model that offers computing services over the internet. The physical hardware of this cloud model is shared by multiple companies. The services offered to customers include storage, bandwidth, or CPU cycles. Public clouds are cost-effective Among the many benefits of a public cloud is that services are offered to the customer through a pay-as-you-go model. This means that no upfront investments must be made, which otherwise lead to running costs for maintaining on-premise hardware and application infrastructure. Instead, the cloud service provider ensures proper management and maintenance of the system and the customer only pays for services consumed. AWS, Azure, and Google are dominating the market Key companies offering public cloud platforms to customers are Amazon Web Services, Microsoft Azure, and Google Cloud. Their preeminence on the market is demonstrated by organizations’ plans to continually migrate their data to the cloud and use cloud applications for their business operations on a global scale.

As of 2024, 73 percent of the enterprise respondents indicated that they have deployed a hybrid cloud in their organization. The migration to hybrid cloud solutions generally happens at the expense of operating single private and public clouds. Hybrid clouds merge public and private clouds A hybrid cloud solution basically merges public and private clouds. Private clouds offer a dedicated cloud infrastructure to a single company and can either be managed by the company itself or by a third-party service. Public clouds, on the other hand, are managed by service providers such as AWS or Microsoft Azure who rent out a part of their distributed data center infrastructure to customers. Hybrid cloud strategies provide flexibility A hybrid cloud solution combines public and private clouds to provide businesses with greater flexibility to move workloads between clouds to suit their needs. Additionally, hybrid cloud services can give businesses more control over their data, as well as offer the opportunity to store sensitive data in a private cloud and run enterprise applications on a public cloud.

In 2024, 49 percent of respondents are already running significant workloads on Amazon Web Services (AWS). Cloud computing as-a-service One of the most prevalent ways for companies to utilize cloud computing is to take advantage of the various “as-a-service” options available from many of the world’s largest tech companies. These services provide organizations with access to computing power, software, and other cloud-related functions without the need for in-house hardware. The software-as-a-service market alone is expected to grow well past the 232 billion U.S. dollar mark by 2020, while the infrastructure-as-a-service market is expected to reach around 195 billion itself in 2024. Companies such as Amazon, Microsoft, and Google have all been quick to incorporate cloud services into their offerings, providing small and mid-sized companies with the opportunity to utilize cloud computing resources without the need for extensive investments into hardware. Having only introduced the business segment in 2014, Microsoft’s intelligent cloud segment has grown rapidly, rivaling even the company’s long-established personal computing segment in terms of revenue generation.

According to the latest report, 80 percent of enterprise respondents indicated that they were adopting Microsoft Azure for public cloud usage. AWS, Microsoft Azure, and Google Cloud, also known as hyperscalers, are among the leading cloud computing platform providers worldwide. Public cloud A public cloud refers to a computing service offered by a provider over the public internet whereby computing resources are made available to the customer. These resources may include storage capabilities, virtual machines, or applications. The customer only pays for resources actually consumed, such as bandwidth or CPU cycles. For organizations, this can lead to cost reduction versus having to buy and maintain on-premises hardware. Cloud computing benefits Cloud adoption is driven by several factors, including increased efficiency, quick deployment, and security. Because cloud providers offer customers to deploy their workloads from many locations globally, latency is reduced, which in turn enhances the customer experience. In addition, cloud-based services are more resilient, as the failure of a virtual machine does not necessarily mean that service availability is negatively impacted. To reap the most benefits, organizations are assessing which cloud models fit their case best and looking to pursue hybrid cloud strategies in the future, which includes the integration of both public and private clouds.

In a 2024 survey, around 61 percent of SMBs indicated that they managed their workloads in public cloud today, along with 60 percent having stored data in public cloud. Additionally, there was a two percent reduction in storage of data in public cloud within the next twelve months.

In the fourth quarter of 2024, the most popular vendor in the cloud infrastructure services market, Amazon Web Services (AWS), controlled 33 percent of the entire market. Microsoft Azure takes second place with 20 percent market share, followed by Google Cloud with 10 percent market share. Together, these three cloud vendors account for 63 percent of total spend in the fourth quarter of 2024. Organizations use cloud services from these vendors for machine learning, data analytics, cloud native development, application migration, and other services. AWS Services Amazon Web Services is used by many organizations because it offers a wide variety of services and products to its customers that improve business agility while being secure and reliable. One of AWS’s most used services is Amazon EC2, which lets customers create virtual machines for their strategic projects while spending less time on maintaining servers. Another important service is Amazon Simple Storage Service (S3), which offers a secure file storage service. In addition, Amazon also offers security, website infrastructure management, and identity and access management solutions. Cloud infrastructure services Vendors offering cloud services to a global customer base do so through different types of cloud computing, which include infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). Further, there are different cloud computing deployment models available for customers, namely private cloud and public cloud, as well as community cloud and hybrid cloud. A cloud deployment model is defined based on the location where the deployment resides, and who has access to and control over the infrastructure.

As of 2024, 46 percent of enterprises already have workloads in the public cloud, with 8 percent planning to move additional workloads to the cloud in next 12 months. In addition, 48 percent of respondents reported having data stored on the public cloud.

In 2023, the global spending on public IT cloud services amounted to approximately 669 billion U.S. dollars in total. Software as a service (SaaS) spending is the largest segment with revenues of around nearly 413 billion U.S. dollars. This growth is driven by organizations across the world replacing their legacy business applications with SaaS applications that are more data-driven and a more appropriate fit for modern cloud architectures. What are SaaS, PaaS, and IaaS? SaaS, Paas, and IaaS are different types of cloud service models. Depending on how much an organization wants to manage its information technology (IT) infrastructure by itself, it can choose one or more of the three service types. SaaS is the most used option for organizations and includes applications, whereas PaaS delivers a framework for developers to build applications. Finally, IaaS is entirely self-service for accessing and monitoring computers. Advantages of cloud service models All these different service models are delivered over the internet and managed to varying degrees by third-party vendors. In choosing one or more of these cloud service models and relying less on running business applications on premises, organizations can spend less money on hardware and software. They can also manage applications with greater flexibility and speed while reducing vendor lock-in.

In 2024, 37 percent of respondents in a global survey reported that the main risk to data security in the cloud was external actors, such as hackers. Other risk factors included companies' own business employees and IT staff.

In 2020, 48 percent of respondents indicate that increased efficiency is the biggest benefit from cloud computing. Greater efficiency can be achieved through cloud computing by making the latest data available more quickly to improve quotas and make forecasts more accurate, for example. Other benefits are the support for collaboration tools and the fact that cloud-based services and solutions are secure, whiile enabling remote accessibility.

This statistic shows the vendor revenue of the public cloud market from 2012 to 2027. In 2018, revenues from the public cloud market are expected to reach combined 258 billion U.S. dollars. That same year, revenue from the SaaS and related PaaS segment was expected to amount to 170 billion U.S. dollars. Cloud computing is a model for providing on-demand access to resources, whether they are networks, storage, applications, or services. For businesses, the benefits of cloud computing are cost savings and improved business agility and responsiveness.