KUALA LUMPUR (May 21): Global end-user spending on public cloud services is forecast to grow 20.4% to total US$675.4 billion (RM3.16 trillion) in 2024, up from US$561 billion in 2023, according to Gartner, Inc.

In a statement on Monday, the consulting firm said this growth is being driven by generative AI (GenAI) and application modernisation.

Gartner vice president Analyst Sid Nag said the growth can be largely attributed to GenAI due to the continued creation of general-purpose foundation models and the ramp-up to delivering GenAI-enabled applications at scale.

“Because of this continued growth, we expect public cloud end-user spending to eclipse the US$1-trillion mark before the end of this decade,” said Nag.

He said all segments of the cloud market are expected to see growth in 2024.

Infrastructure-as-a-service (IaaS) is forecast to experience the highest end-user spending growth at 25.6%, followed by platform-as-a-service (PaaS) at 20.6%, he said.

Nag said IaaS continues at a robust growth rate that is reflective of the GenAI revolution that is underway.

He said the need for infrastructure to undertake AI model training, inferencing and fine tuning has only been growing — and will continue to do so exponentially — and have a direct effect on IaaS consumption.

“While cloud infrastructure and platform services are driving the highest spending growth, SaaS remains the largest segment of the cloud market in end-user spending.

“SaaS spending is projected to grow 20% to total US$247.2 billion in 2024.

“SaaS spend is driven by applications being modernised by independent software vendors to run in a SaaS-based consumption model,” said Nag.

Nag said organisations continue to increase their usage of cloud for specific use cases such as AI, machine learning, Internet of Things and big data, which are driving this SaaS growth.