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Global Cloud Industry Outlook 2024

Katyayan Gupta, Vice President - Advisory, 20 Feb 2024



In 2024, let's consider a real-world example of a cloud-driven world centered around developing and using advanced smart cities. The city's infrastructure, including transportation systems, energy grids, and waste management, is connected through a cloud-based IoT network. Cloud-driven autonomous vehicles navigate the city, utilizing real-time traffic data, weather conditions, and other relevant information to ensure safe and efficient transportation. The healthcare system is connected through a cloud-based platform that securely stores and shares patient data among medical professionals. Telemedicine services are readily available, allowing residents to access healthcare remotely, and predictive analytics help identify potential health trends within the population.

The global cloud industry is evolving unprecedentedly, fuelled by technological advancements, increasing digitalization, and a growing demand for scalable and efficient solutions. As we step into 2024, it's crucial to explore the current landscape of the global cloud market, highlighting key trends, opportunities, challenges, segment nuances, and recent developments shaping the industry. The cloud industry growth in 2024 is driven by several key trends, contributing to increased market expansion, revenue, and adoption. Transformative shifts, such as multi-cloud adoption, AI and machine learning enrichments, hybrid cloud strategies, edge computing integration, serverless computing growth, security and compliance focus, sustainability initiatives, containerization, DevOps & CI/CD practices, and exploration of quantum computing, signify the cloud industry growth.

MarketsandMarkets anticipates the global cloud market size to grow from USD 626.42 billion in 2023 to USD 727.90 billion by 2024, up 16.2% YoY. Tech companies increasingly focus on generative AI-based cloud services, poised to revolutionize industries globally, turning it into an investment magnet.

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Industry Trends:

The cloud market continues its robust growth trajectory, driven by factors such as the rise of remote work, digital transformation initiatives, and fierce competition among cloud hyper-scalers. Some other major cloud industry trends include increasing spending on cloud security, rapid growth in AI, and the FinOps revolution. Automation, AL, and ML are emerging as key trends in the cloud industry. In 2024, we observe the emergence of industry-specific clouds catering to healthcare, finance, manufacturing, and more. These clouds provide customized services, compliance frameworks, and applications designed to address the specific needs of each industry. In 2024, we expect several countries to invest in building sovereign cloud infrastructure to ensure that sensitive data stays within national borders, addressing data protection and privacy concerns. For example, Oracle has introduced 2 EU cloud regions to meet data sovereignty requirements.

Additionally, edge computing is expected to gain prominence as a complement to cloud services; this involves processing data closer to the source of generation, reducing latency, and improving real-time processing for applications. The serverless computing model will become more popular, allowing developers to focus solely on writing code without managing the underlying infrastructure. In 2024, businesses are expected to increasingly look for ways to optimize costs associated with cloud services; there will be growing penetration of cloud FinOps practices.

Adopting cloud solutions is anticipated to be significantly influenced by implementing AI/Gen AI.

In 2024, a cloud-driven industry will be characterized by the widespread integration of AI technologies across various sectors. The surge in AI adoption is a driving force reshaping the cloud computing market landscape, particularly with specialized infrastructures designed to accommodate computational behemoths like Large Language Models (LLMs). This transformative shift democratizes AI, significantly lowering entry barriers for businesses of all sizes.

Heightened security focus and emerging trends such as quantum computing

In 2024, trends focus on enhancing data infrastructure and fortifying cyber defenses. Quantum computing is gaining prominence and may provide solutions through cloud platforms. The spotlight will be on elevating cloud-native security features, encompassing zero-trust architectures and AI-driven threat detection, setting the stage for developing efficient, integrated, and secure cloud ecosystems.

Sustainability: Data centers leading the charge

Business leaders have recognized the significance of sustainable DCs. In 2024, sustainability will take center stage, with data centers positioned at the forefront of eco-friendly initiatives. Advanced AI systems will predict usage patterns and optimize workloads, substantially reducing energy consumption.

Managing cloud costs

More than 80% of enterprises stated managing cloud spending as a top cloud challenge. Organizations are increasingly recognizing the importance of FinOps practices to optimize cloud spending. More companies will adopt FinOps methodologies to bridge the gap between finance, operations, and engineering teams for better cloud cost management.

Rapid cloud growth in ASEAN countries

Four in five ASEAN businesses will plan an entire cloud migration strategy by 2024. Cloud adoption in ASEAN countries will be driven by various factors, including digital transformation initiatives, increased connectivity, and a growing awareness of the benefits of cloud technologies. AWS plans to open a Malaysian cloud region in 2024.


The global cloud industry analysis presents significant growth opportunities, especially in healthcare, finance, and manufacturing. Cloud solutions offer these industries the ability to streamline operations, enhance security, and leverage advanced analytics for data-driven decision-making.

Increasing competition among CSPs

Top players are capitalizing on the growth of the cloud industry. As digital transformation accelerates globally, leading players such as Amazon Web Services (AWS), Microsoft Azure, and Google Cloud will face a fierce battle for dominance, seeking to capture market share, expand service offerings, and deliver cutting-edge solutions to an increasingly demanding clientele. For example, AWS will unveil a cloud region in Malaysia by 2024. AWS, Microsoft, and Google Cloud will capture significant market shares in 2024. Regional players like Alibaba Cloud (China) and Tencent Cloud (China) will make substantial strides in the cloud industry, challenging industry giants' dominance.

Shift to AI & cybersecurity integrated cloud solutions.

The demand for cloud-based artificial intelligence and machine learning solutions is growing. Opportunities exist for businesses that can provide specialized AI/ML services, platforms, or consulting to help organizations implement and optimize machine learning models. In our cloud industry analysis, cybersecurity emerges as a critical focal point. As cloud adoption proliferates, so does the need for robust security measures. Entrepreneurs and companies specializing in cybersecurity solutions can capitalize on this growing demand by providing innovative tools for threat detection, identity management, and secure cloud infrastructure – a key takeaway from our cloud industry overview. Subsequently, the landscape of cloud-native development is evolving rapidly, as emphasized in our cloud industry analysis. Developers are increasingly adopting containerization and serverless computing.

In the race for supremacy, top cloud companies are heavily investing in emerging technologies such as generative AI. Sustainability is emerging as a critical differentiator in the competitive landscape. Cloud providers are increasingly adopting eco-friendly practices, utilizing renewable energy sources for data centers, and implementing carbon offset programs to appeal to environmentally conscious clients.


As data regulations become more stringent globally, ensuring compliance with various data protection laws (such as GDPR and CCPA) can be challenging. Cloud service providers must adapt their services to comply with diverse regulatory frameworks. In addition, major players may also face competition from global and regional/local players for cloud expansion. With growing concerns about the environmental impact of data centers, there is increasing pressure on the cloud industry to adopt sustainable practices. The fast-paced evolution of cloud technologies can challenge organizations to keep up; adopting new technologies like serverless computing, edge computing, and AI requires continuous learning and adaptation. With the increasing adoption of cloud services, the potential for cyber threats and data breaches may escalate. Ensuring robust security measures and staying ahead of evolving cyber threats will be necessary. Many organizations opt for a hybrid or multi-cloud strategy, utilizing both on-premises and multiple cloud providers; managing the complexity of such environments, ensuring seamless integration, and maintaining consistent performance can be challenging. Efficiently managing cloud resources and controlling costs can be difficult. For this reason, cloud FinOps solutions are expected to gain traction in 2024. Additionally, rising cloud costs could make organizations think twice before migrating.

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Segment Nuances:

In the cloud industry overview, while SaaS will retain its position as the reigning champion with the largest market share of 52.3% in the total cloud industry market, IaaS and PaaS are set to experience rapid YoY growth rates of 21.2% and 19.3%, respectively, in 2024. The development and adoption of industry-specific SaaS solutions tailored to specific verticals' unique needs and regulations is expected to grow. 2024 will see the rise of automated SaaS. In the SaaS industry, the Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) segments are anticipated to dominate in 2024. ERP industry analysts and veterans expect that 2024 will be marked by ongoing cloud adoption, the incorporation of valuable generative AI capabilities, and the integration of additional applications like enterprise application management and Field Service Management (FSM). The CRM industry's market value is expected to hit USD 111.49 Billion by 2024.



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Asia Pacific continues to outpace other regions with YoY growth rates of 19.8% YoY in 2024, with continued dominance from Alibaba Cloud in China and increased adoption in other countries. Local players in countries like India, Japan, and South Korea will gain traction as businesses embrace cloud solutions. In North America, the cloud market will remain highly competitive, with established players like AWS, Microsoft Azure, and Google Cloud continuing to dominate. The region will likely see increased adoption of cloud-native technologies, AI, and machine learning across various industries. In Europe, privacy regulations like GDPR will influence the choice of cloud providers, favoring those that comply with stringent data protection standards.


Recent Developments:

  1. In January 2024, Microsoft and Vodafone signed a 10-year strategic deal to bring gen AI, cloud, and other digital services to more than 300 million businesses and customers. Over the next decade, Vodafone plans to allocate $1.5 billion towards developing cloud and customer-centric AI services in collaboration with Microsoft. In addition, Vodafone will accelerate its cloud transformation by modernizing its data centers on Microsoft Azure.
  2. In January 2024, Microsoft introduced new generative AI and data solutions throughout the shopper journey, providing copilot experiences via the Microsoft Cloud for Retail.
  3. In January 2024, Capgemini and AWS extend their strategic partnership to facilitate the widespread adoption of generative AI across enterprises. This collaborative effort between Capgemini and AWS is directed explicitly at assisting clients in unlocking the business benefits of adopting generative AI, addressing challenges such as cost, scale, and trust.
  4. In January 2024, Google Cloud and Hugging Face unveiled a new strategic partnership, allowing developers to leverage Google Cloud's infrastructure for all Hugging Face services. This collaboration also facilitates the training and deployment of Hugging Face models on the Google Cloud platform.
  5. In December 2023, ServiceNow and Amazon Web Services (AWS) declared a strategic collaboration that spans five years. The partnership will begin in early 2024 when ServiceNow's platform and complete range of solutions will be accessible as a Software-as-a-Service (SaaS) offering on the AWS Marketplace. The collaborative effort will leverage the extensive expertise of both entities, with AWS recognized as the leading global cloud provider and ServiceNow catering to around 85% of Fortune 500 companies.
  6. In November 2023, IBM broadened its association with AWS to enhance innovation in generative AI and established an innovation lab in India. IBM's collaboration with AWS aims to extend support to a broader range of clients across industries and geographies to unlock maximum cloud and generative AI potential. This collaboration guarantees that developers using Hugging Face will be able to utilize Google Cloud's specialized AI platform, Vertex AI, along with its secure infrastructure, expediting the development of the next generation of AI services and applications.
  7. In September 2023, Microsoft and Oracle enhanced their collaboration to provide Oracle Database Services on Oracle Cloud Infrastructure within the Microsoft Azure environment. Oracle and Microsoft introduced Oracle Database@Azure, enabling customers to utilize Oracle database services hosted on Oracle Cloud Infrastructure (OCI) directly within Microsoft Azure data centers.
  8. In July 2023, DigitalOcean, renowned for its cloud services tailored to small and medium-sized businesses (SMBs) and startups, completed the acquisition of Paperspace. Paperspace is a top-tier provider of cloud infrastructure-as-a-service, notably recognized for its support of highly scalable applications utilizing graphics processing units (GPUs). The deal size for the acquisition was valued at USD 111 million.
  9. In June 2023, IBM acquired Apptio, a financial and operational IT management and optimization (FinOps) software pioneer, for USD 4.6 billion.

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