Cloud spending projected to grow 19% this year on back of strong 2024

Cloud computing concept image showing a cloud symbol attached to separate containers.
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Cloud spending went from strength to strength in 2024, with enterprises globally ramping up investment – and Canalys expects more of the same in 2025.

The analyst firm predicts that spending on global cloud infrastructure services will grow by 19% this year, following on from a strong 2024 Q4 that saw spending rise by 20% year-on-year to $86 billion.

Spending also grew by 20% for FY 2024, up from $267.7 billion in 2023 to $321.3 billion in 2024, with the key driver behind growth being the expanded use of AI models necessitating cloud adoption.

“By the second half of 2024, the top cloud vendors all reported positive returns on AI investments, with AI applications having a notable impact on their overall cloud business performance,” Canalys said.

“As AI market competition intensifies, cloud hyperscalers plan to further expand investments in cloud and AI infrastructure in 2025 to keep pace with rising demand.”

Hyperscalers the big cloud spending winners

The ranking of public cloud providers remains unchanged, with AWS on top with the largest market share followed by Microsoft Azure and Google Cloud Platform (GCP).

The combined market share of these firms accounted for 64% of cloud spending, with their total spending up 25% year-on-year.

AWS maintained a 19% annual growth rate whileMicrosoft and Google both suffered a slight decline in growth, due largely to AI demand outpacing supply.

All three hyperscalers are leading the charge in the global generative AI race, announcing huge investment in infrastructure to keep pace with surging enterprise demand for compute capacity.

Cloud market bounces back

The latest figures from Canalys highlight a bullish mood across the global enterprise landscape for the year ahead and reinforce predictions made by the consultancy at the beginning of 2024.

Last year, the firm projected cloud spending to increase by 20% based on the previous year’s growth rate of 19%.

That prediction came in the wake of a troubling period for the global cloud market, with macroeconomic conditions having contributed to a significant dip in enterprise cloud spending.

The ‘cloud slowdown’ of 2023, a term coined by the Uptime Institute, saw hyperscalers experience far slower growth rates compared to pandemic-era highs.

The research noted a revenue increase of 27.5% for AWS in Q3 2022, a dip from the 33% revenue increase posted in the previous quarter and marking the “slowest growth” in the company’s history, according to Uptime.

Research from later in the year was more promising, though, with Gartner predicting a surge in cloud spending despite tighter budgets. Sid Nag, VP analyst at Gartner, said firms cannot afford to neglect cloud spending at the time.

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George Fitzmaurice
Staff Writer

George Fitzmaurice is a staff writer at ITPro, ChannelPro, and CloudPro, with a particular interest in AI regulation, data legislation, and market development. After graduating from the University of Oxford with a degree in English Language and Literature, he undertook an internship at the New Statesman before starting at ITPro. Outside of the office, George is both an aspiring musician and an avid reader.