The worldwide infrastructure as a service (IaaS) market expanded 22.5% in 2024 to reach $171.8bn, according to new figures from technology research firm Gartner. Amazon retained its position as the leading global provider, ahead of Microsoft, Google, Alibaba and Huawei.
The latest data shows the top five IaaS providers accounted for 82.1% of the market last year, underscoring the sector’s concentration among a handful of hyperscale players. Amazon Web Services (AWS) posted revenue of $64.8bn, capturing 37.7% of the market. Microsoft followed with a 23.9% share, while Google, Alibaba Group and Huawei maintained their rankings year-on-year.
Shifting enterprise priorities
Hardeep Singh, principal analyst at Gartner, said the growth reflects a sustained appetite for flexibility, resilience and performance improvements among enterprises.
“As enterprises continue to seek greater flexibility, improved resilience and optimized performance, there is sustained demand for cloud migration and modernization services,” Singh said.
He noted that organisations are increasingly adopting multi-platform strategies, particularly to support artificial intelligence (AI) initiatives, and are prioritising the migration of existing workloads to cloud environments. This includes the deployment of cloud-native applications across diverse operating environments.
Data sovereignty and gradual transition
A growing focus on data residency and sovereignty is influencing cloud adoption strategies, Singh added. Many enterprises are opting for phased transitions to the cloud, enabling them to retain control over data and operational governance while still tapping into the scalability benefits of cloud infrastructure.
AI-driven competition
Cloud providers are also investing heavily in AI infrastructure in a bid to lead the emerging AI-optimised IaaS market. Singh said providers anticipate that AI will become a much larger revenue contributor in the future, even though it currently makes up a relatively small portion of IaaS income.
He highlighted the role of GPU as a Service (GPUaaS) offerings from non-hyperscale providers in meeting immediate capacity needs. These services, though still in early stages, are providing enterprises with high-performance, on-demand computing power, particularly for AI workloads.
Market outlook
While the leading positions in the market have remained stable, analysts expect competition to intensify as providers diversify their AI capabilities and expand into new regions. The combination of modernisation demands, AI adoption, and the need for flexible, sovereign-compliant cloud solutions is likely to sustain double-digit market growth in the near term.
Full market share details are available in Gartner’s reports Market Share: Enterprise Public Cloud Services, Worldwide, 2024 and Market Share Analysis: Infrastructure as a Service, Worldwide, 2024.
Gartner is also offering a complimentary guide, Devising an Effective Cloud Strategy, for organisations seeking to maximise the benefits of cloud computing in evolving operational landscapes.
