Cloud infrastructure and platforms form the foundation upon which digital economies are built. For more than a decade, the modernization and migration of applications and data to the cloud have been a priority for companies worldwide. Under the weight of high interest rates, inflation, and sluggish post-pandemic recovery, the growth of the cloud infrastructure- and platform-as-a-service (IaaS and PaaS) market decelerated in 2023. In 2024, driven by economic recovery and the expanding applications of generative AI, the industry projects more robust growth. The growth of generative AI has been staggering, and this is expected to continue even more strongly in 2024. Considering that training large language models requires storing and processing immense volumes of data—a task that is hardly feasible outside the extensive data centers of major cloud hyperscalers, the IaaS and PaaS industry is well-positioned to reap vast benefits from this technological revolution.
In this report, Frost & Sullivan analyzes the evolution of IaaS and PaaS solutions in the cloud, the factors that will drive or restrain market growth in 2024, the challenges and opportunities for public cloud infrastructure and platform providers, and the market's size and forecasted growth.
Global Cloud IaaS and PaaS Market Revenue Forecast
The estimated revenue for the base year 2023 is $235.99 billion, with a CAGR of 25.4% for the study period from 2023 to 2029.
Impact of the Top 3 Strategic Imperatives on the Global Cloud Infrastructure-as-a-Service and Platform-as-a-Service Market
Disruptive Technologies
why
The hyperdigitization era continues in 2024, bolstering the emergence and development of technologies that significantly alter the way private and public organizations operate, create value, and compete. Generative AI, machine learning (ML), edge and serverless computing, chip development, and 5G technology, for example, play a significant role in shaping the cloud market landscape—driving the development and adoption of cloud technology.
Frost Perspective
Amid this continuous evolution, a firm cloud foundation is becoming imperative for companies as they strategically incorporate emerging technologies into their operations. This decision can unlock opportunities to maximize operational efficiency, enhance customer experience, and generate new business opportunities and significant competitive advantages.
Competitive Intensity
why
Although the infrastructure- and platform-as-a-service (IaaS/PaaS) market will remain highly concentrated in 2024 owing to high entry barriers, western giants (AWS, Microsoft, and Google) are facing strong competition from Chinese companies such as Huawei and Tencent, especially in Asia, Africa, and Latin America. Market growth will remain robust, especially because of the development of native applications with generative AI and the support of advanced hardware development.
Frost Perspective
Cloud service providers will continue to expand their physical presence globally, as reduced latency has become a top priority for companies seeking to improve app performance. Cloud providers will align with customers' needs and optimize their servers by developing and deploying custom-designed chips, especially to process AI workloads.
Transformative Megatrends
why
AI has emerged as a global force, redefining the business and social landscape with a far-reaching impact on economics, cultures, and personal lives and elevating the importance of underlying technologies, especially cloud computing. AI represents a radical shift in how businesses operate and societies interact with technology. From automating repetitive tasks to advanced data analysis and algorithm-based decision-making, AI is rapidly permeating all aspects of modern life.
Frost Perspective
The development of generative AI applications will continue to surge in 2024, impacting the growth of underlying technologies such as cloud services. Companies that effectively leverage this technology to enhance their products and services will outperform competitors. However, high costs will remain a barrier for many businesses, and challenges such as private data usage and regulations will become more prominent.
Global Cloud IaaS and PaaS Market Segmentation by Region
- North America
- Latin America
- Europe, Middle East, and Africa (EMEA)
- Asia-Pacific (APAC)
Competitors in the Global Cloud IaaS Market
The marketplace for cloud IaaS and PaaS is global and highly concentrated. The top 5 providers in this market, commonly known as hyperscalers, hold more than 89.8% of the market share, with competitors offering nearly identical services globally. This market concentration forms a high barrier to entry for smaller, local players.
- AWS
- Microsoft Azure
- Google Cloud Platform
- Alibaba Cloud
- IBM Cloud
- Oracle Cloud Infrastructure
- Tencent
- Huawei
Cloud IaaS and PaaS Market—Growth Drivers
- Cloud services' integration with AI is driving IaaS–PaaS demand.
- Custom silicon development improves performance, optimizes costs, and increases margins for IaaS–PaaS providers.
- Amid anticipated economic recovery, enterprises’ digital transformation efforts drive IaaS and PaaS industry growth.
- Sovereign cloud initiatives increase cloud adoption, propelling cloud hyperscalers into the next growth phase and driving geographic expansion.
Why is it Increasingly Difficult to Grow?
The Strategic Imperative 8™
Impact of the Top 3 Strategic Imperatives on the Global Cloud Infrastructure-as-a-Service and Platform-as-a-Service Market
Growth Opportunities Fuel the Growth Pipeline Engine™
Growth Metrics
Market Growth Overview
Market Growth Overview (continued)
Market Growth Overview (continued)
Market Growth Overview (continued)
Global Cloud IaaS and PaaS Market Definitions
Global Cloud IaaS and PaaS Market Definitions (continued)
Global Cloud Services Landscape
Global Cloud IaaS and PaaS Market Segmentation by Region
Research Scope
Competitors in the Global Cloud IaaS Market
Cloud IaaS and PaaS Market—Growth Drivers
Growth Driver Analysis for the Cloud IaaS and PaaS Market
Growth Driver Analysis for the Cloud IaaS and PaaS Market (continued)
Growth Driver Analysis for the Cloud IaaS and PaaS Market (continued)
Growth Driver Analysis for the Cloud IaaS and PaaS Market (continued)
Cloud IaaS and PaaS Market—Growth Restraints
Growth Restraint Analysis for the Cloud IaaS and PaaS Market
Growth Restraint Analysis for the Cloud IaaS and PaaS Market (continued)
Growth Restraint Analysis for the Cloud IaaS and PaaS Market (continued)
Growth Restraint Analysis for the Cloud IaaS and PaaS Market (continued)
Forecast Assumptions—Global Cloud IaaS and PaaS Market
Global Cloud IaaS and PaaS Market Revenue Forecast
North America—Cloud IaaS and PaaS Market Revenue Forecast
Latin America—Cloud IaaS and PaaS Market Revenue Forecast
EMEA—Cloud IaaS and PaaS Market Revenue Forecast
Asia-Pacific—Cloud IaaS and PaaS Market Revenue Forecast
Revenue Forecast Discussion
Revenue Forecast Discussion (continued)
Revenue Forecast Discussion (continued)
Provider Market Share
Market Share by Region
Growth Opportunity 1—Sovereign Cloud
Growth Opportunity 1—Sovereign Cloud (continued)
Growth Opportunity 2—Cost Optimization
Growth Opportunity 2—Cost Optimization (continued)
Growth Opportunity 3—AI-Cloud Integration
Growth Opportunity 3—AI-Cloud Integration (continued)
List of Exhibits
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| Deliverable Type | Market Research |
|---|---|
| Author | Mariano Gimenez |
| Industries | Information Technology |
| No Index | No |
| Is Prebook | No |
| Keyword 1 | Cloud Iaas |
| Keyword 2 | Paas Market |
| Keyword 3 | Cloud Infrastructure |
| Podcast | No |
| Predecessor | K8E5-01-00-00-00 |
| WIP Number | KA5C-01-00-00-00 |
Global Cloud Infrastructure-as-a-Service and Platform-as-a-Service Market
Cost Optimization Amid Economic Uncertainty, Sovereign Cloud Expansion, and Booming AI
15-Jul-2024
Global
Market Research