Gartner SaaS Forecast: Spending Surpasses Expectations
It looks like cloud spending is really taking off, even more than folks at Gartner predicted. We’re talking about public cloud services, and the numbers are pretty wild. By 2026, it’s expected that over 45% of all IT spending by businesses will be on public cloud, which is a huge jump from just under 17% back in 2021. That’s a big shift, and it shows how much companies are relying on the cloud these days.
Public Cloud Services End-User Spending to Exceed $1 Trillion
Get this, the total amount people are spending on public cloud services is set to hit a massive $723.4 billion in 2025. That’s up from $595.7 billion in 2024. It’s not just one area either; pretty much every part of the cloud market is seeing double-digit growth. This really highlights how much pressure IT departments are under to get cloud integrated into their strategies, especially with all the new AI stuff happening.
Double-Digit Growth Across All Cloud Market Segments
When you break it down, it’s not just one or two services driving this. Cloud application infrastructure, or PaaS, is expected to grow by over 21% in 2025. Then there’s SaaS, or cloud application services, which is also seeing solid growth around 19%. Even the basic cloud system infrastructure, IaaS, is growing fast, with a projected 24.8% increase. It’s a broad trend, showing that companies are really embracing cloud across the board.
SaaS Spending Reaches New Milestones
Specifically for SaaS, the spending is projected to reach $299 billion in 2025. That’s a significant increase from $250.8 billion in 2024. This growth is fueled by a few things, like how companies are using AI more and more in their operations. Plus, the push for hybrid and multicloud setups means businesses need integrated platforms to make things simpler, and SaaS is a big part of that picture.
Key Trends Driving Cloud Adoption
So, what’s really pushing companies to adopt cloud services more and more? It’s not just one thing, but a few big shifts that are changing how businesses operate.
Cloud Ubiquity and Expanding Use Cases
Think about it, the cloud is pretty much everywhere now. It’s not just for storing files anymore. We’re seeing it used for all sorts of new things, like making apps that can change on the fly or using AI to make processes smarter.
- Cloud is becoming the backbone for new tech. Stuff like composable business models and even advanced mobile banking rely heavily on the cloud’s ability to scale and be flexible.
- Newer mobile tech, like 5G, is also making the cloud more accessible and useful in more places.
- We’re seeing more specialized cloud setups, too, like industry-specific cloud platforms, which help companies get things done faster.
Regional Cloud Ecosystems and Data Sovereignty
This is a bit more complex. As countries and regions have different rules about data and technology, we’re seeing more localized cloud services pop up.
- Companies, especially in sensitive sectors like finance or government, are worried about having all their data in one place, especially if it’s outside their own country.
- This is leading to initiatives where regions want to build their own cloud infrastructure or have more control over how data is handled.
- It’s a balancing act between using global cloud services and meeting local regulations and needs.
Sustainability and Carbon-Intelligent Cloud Initiatives
This is a newer, but increasingly important, trend. Businesses are starting to think about the environmental impact of their technology.
- There’s a growing focus on making cloud operations more energy-efficient.
- Companies are looking for cloud providers who are transparent about their energy use and are actively working to reduce their carbon footprint.
- This means choosing services that are designed to be more eco-friendly, which can also lead to cost savings in the long run. The push for greener tech is becoming a real factor in cloud decisions.
The Rise of Cloud Infrastructure and Platform Services (CIPS)
It’s pretty clear that Cloud Infrastructure and Platform Services, or CIPS, are really taking off. Think of CIPS as a complete package where you get both the basic building blocks (IaaS) and the tools to actually build and run applications (PaaS) all rolled into one neat cloud service. Companies are going for these integrated platforms because, let’s face it, modern applications are complicated. Trying to manage all the different pieces separately is a headache, so having a unified system just makes development, deployment, and day-to-day operations a lot smoother.
This trend is also getting a big push from the move towards using multiple cloud providers, known as multicloud. As more businesses adopt this strategy, they’re looking for ways to make these different cloud environments work together. That’s where cross-cloud integration frameworks come in. They’re becoming super important because they allow businesses to actually make multicloud a reality, especially when it comes to handling advanced AI tasks. We’re talking about things like federated AI capabilities that can span across different clouds to power complex artificial intelligence workloads.
Here’s a look at how spending is shaping up:
| Service Category | 2025 Spending (Billions USD) |
|---|---|
| Cloud Application Infrastructure (PaaS) | $80.002 |
| Cloud System Infrastructure (IaaS) | $91.543 |
| Cloud Management and Security | $25.987 |
- Integrated Platforms: These simplify how developers and IT teams work by combining IaaS and PaaS. This means less hassle managing separate services.
- Multicloud Adoption: As more companies use services from different cloud providers, the demand for integrated CIPS solutions that can bridge these environments grows.
- Cross-Cloud Integration: Frameworks that allow different cloud services to communicate are key. This is especially true for advanced AI workloads that might need resources from multiple clouds. This is a big deal for companies looking to build out their AI capabilities.
Basically, CIPS is becoming the go-to for businesses that want to streamline their cloud operations and take advantage of the latest advancements, particularly in AI. It’s all about making things simpler and more powerful.
Artificial Intelligence’s Impact on Cloud Spending
GenAI Models Drive Demand for Advanced Cloud Training
Generative AI, or GenAI, is really changing the game for cloud spending. Even though some people’s expectations for GenAI might be cooling off a bit, the money being spent on it isn’t slowing down. Think about it: these new AI-powered computers are coming out, but they don’t have that one killer app yet that makes you absolutely need the new hardware. Still, folks are buying them, and that’s pushing up spending.
AI-Optimized Servers Outpace Traditional Servers
When we look at the hardware side, servers built specifically for AI tasks are seeing massive growth. In fact, spending on these AI-optimized servers is projected to more than double the spending on regular servers in 2025. That’s a huge shift.
| Category | 2024 Spending (Billions USD) | 2025 Spending (Billions USD) | Growth % (2025) |
|---|---|---|---|
| AI-Optimized Servers | ~ $90 | ~ $202 | ~ 124% |
| Traditional Servers | ~ $110 | ~ $100 | ~ -9% |
Hyperscalers Pivot to AI Oligopoly Market
Hyperscalers, you know, the big cloud providers, are really leaning into AI. They’re expected to account for a huge chunk of cloud spending in 2025. Looking ahead to 2028, these companies are predicted to be managing a massive amount of AI-optimized servers, potentially hitting a trillion dollars. But here’s the interesting part: they’re not just sticking to their old business models. They’re shifting to become key players in a more concentrated AI market, almost like an oligopoly. This means they’re not just providing cloud services anymore; they’re becoming central to how AI itself is developed and deployed.
Cloud Computing: From Disruptor to Business Necessity
It’s pretty wild to think about how far cloud computing has come. Not too long ago, it felt like this new, fancy thing that only tech-savvy companies were really messing with. Now? It’s basically the engine that keeps most businesses running. We’re seeing it move from being this cool tool that helps you do new stuff, to something you absolutely need just to stay in the game.
Cloud as a Catalyst for Digital Innovation
Remember when companies used the cloud to just, like, run their servers differently? That’s old news. Today, businesses are using cloud tech to completely rethink how they operate. Think about things like making software updates happen instantly, or using smart AI tools that can predict what customers might want next. These kinds of capabilities were really hard, if not impossible, to pull off without the cloud. It’s like the cloud gave everyone a superpower to build and test new ideas way faster than before. To really get the most out of this, though, companies have to make sure their teams know how to use these new tools and work together better. It’s not just about the tech; it’s about how people use it.
Accelerating Business Transformation with Cloud
Many businesses are now looking at the cloud not just for IT tasks, but as a way to fundamentally change how they do business. It’s enabling new business models, like platforms that connect different services or analyze huge amounts of data. For example, a car company might use cloud services to offer fraud protection for used cars, or a drug company could speed up vaccine research using cloud-based AI. By 2028, Gartner predicts that over half of all companies will be using industry-specific cloud platforms to get their projects done faster. This means the cloud is becoming less of a choice and more of a requirement for staying competitive.
Cloud as an Integral Part of Business Operations by 2028
Looking ahead, the cloud is set to become so woven into how businesses work that it’ll be hard to imagine operations without it. By 2028, most organizations are expected to be fully digital, able to react quickly to changes in the market or customer needs. To make this happen, IT leaders will need to have a really solid plan for how they manage their cloud setup. It’s not just about having the cloud; it’s about running it efficiently to meet business goals. This shift means the cloud is moving from being a disruptor to a core necessity for survival and growth.
Navigating the Evolving Cloud Landscape
The Role of Cloud in Modernizing IT Environments
So, the cloud isn’t just a place to store files anymore, right? It’s really about making our whole IT setup work better. Think about it – older systems are clunky, hard to update, and frankly, a bit of a headache. Moving to the cloud helps fix that. It’s about getting things running smoother, making sure systems don’t go down unexpectedly, and supporting how we all work now, which is often from different places. It’s like upgrading from a flip phone to a smartphone; suddenly, everything is just easier and more capable.
Addressing GenAI Challenges in Hybrid Cloud
Now, with all this talk about AI, especially generative AI, things get a bit more complicated, particularly if you’re using a mix of cloud and your own servers (that’s hybrid cloud). GenAI needs a lot of power and specific setups. Making sure your AI models can talk to your existing data, which might be on-premise, is a big puzzle. You have to figure out how to connect these different worlds securely and efficiently. It’s not just about having the AI tools, but making them play nice with everything else you’ve already got. Getting this integration right is key to actually using AI effectively without breaking your current systems.
Preparing for AI and GenAI Infrastructure at the Edge
And then there’s the ‘edge.’ This means processing data closer to where it’s created, like on a factory floor or in a retail store, instead of sending it all back to a central data center. With AI, especially GenAI, doing some of this processing locally can make things much faster. Imagine a smart camera that can analyze video in real-time without lag. But this requires new kinds of hardware and software designed for these specific tasks. It’s a whole new ballgame for IT infrastructure, and companies need to start thinking about what kind of gear they’ll need to make this happen smoothly.
Looking Ahead: The Cloud’s Continued Evolution
So, what does all this mean for businesses looking at 2026? It’s pretty clear that cloud computing isn’t just a trend anymore; it’s becoming a core part of how companies operate. We’re seeing massive growth in spending, with cloud services expected to make up a much bigger chunk of IT budgets. Things like AI are really pushing this forward, making cloud infrastructure more important than ever. Plus, with more focus on things like sustainability and regional needs, the cloud landscape is getting more complex but also more capable. Companies that don’t adapt and really embrace the cloud are likely to get left behind. It’s all about making the cloud work for your specific business goals, and that’s going to be the main challenge and opportunity for the next few years.
