PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1877407
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1877407
Cloud computing market size was valued at US$ 754,567.89 Million in 2024, expanding at a CAGR of 20.5% from 2025 to 2032.
Cloud computing delivers on-demand compute, storage, and networking over the internet, allowing businesses to scale resources dynamically without investing in physical infrastructure. It powers mission-critical applications, from data analytics to AI and enterprise systems, by offering global access, elasticity, and pay-as-you-go pricing. Cloud platforms support large-scale AI training and inference; Gartner forecasts public cloud spending to hit US$ 723.4 billion in 2025. Around 90% of organizations are expected to adopt hybrid cloud by 2027, offering both flexibility and resilience. Moreover, Cloud lowers time to market, supports remote work, and helps digital transformation across sectors.
Cloud Computing Market- Market Dynamics
Increasing internet penetration and accelerating ICT digitalization to propel market demand
Key drivers of global cloud adoption include soaring internet penetration, enterprise digitization, regulatory shifts, and concentrated vendor investment. Internet access reached 68% of the world's population in 2024 (International Telecommunication Union), expanding the addressable base for cloud and edge-enabled services. Digitalization and ICT growth are accelerating cloud demand: the Organization for Economic Co-operation and Development (OECD) reports the ICT sector grew 7.6% in 2023, nearly 3X faster than the broader economy, underscoring how digital services and cloud platforms are driving GDP-linked investment.
Moreover, enterprise adoption is measurable: 45.2% of EU enterprises used cloud services in 2023, with significantly higher uptake among large firms - reinforcing commercial pull for SaaS, IaaS, and PaaS. Market concentration also supports global scalability, with Amazon and Microsoft together holding up the major market share in some OECD countries, enabling rapid R&D expansion in AI-driven cloud offerings. Public-sector digital transformation, cross-border data flows, and sustainability mandates continue pushing governments and enterprises toward resilient and energy-efficient cloud infrastructures.
The Global Cloud Computing Market is segmented on the basis of Service, Deployment, Enterprise Size, Workload, End-use, Type of Technology, and Region.
The market is divided into three categories based on Service: Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). SaaS should be closely looked at due to its rising adoption by enterprises shifting from on-premises software to subscription-based models, supported by increasing use of CRM, collaboration suites, and workflow automation tools. IaaS is also a key segment to watch, as enterprises continue migrating workloads to virtualized compute, storage, and networking environments, particularly driven by AI/ML workloads and large-scale digital transformation. PaaS remains important for developers seeking scalable environments for application deployment, container management, and CI/CD operations.
The market is divided into ten categories based on End-use: BFSI, Retail & Consumer Goods, IT & Telecom, Energy & Utilities, Manufacturing, Healthcare, Government & Public Sector, Media & Entertainment, and Others. Among these, BFSI is a segment worth watching due to increasing cloud-based core banking modernization, fraud analytics, and digital payments infrastructure. IT & Telecom is also significant, with operators increasingly relying on cloud-native architectures, edge-cloud integration, and 5G service monetization platforms. Healthcare continues to emerge as a key area driven by EHR digitization, telemedicine platforms, and AI-enabled diagnostics, making it an important segment to track over the forecast period.
Cloud Computing Market- Geographical Insights
Global cloud adoption is shaped by digital-transformation intensity, hyperscaler expansion, and national data-sovereignty frameworks. North America holds the largest share, supported by mature cloud infrastructure and enterprise-scale AI integration. The U.S. leads the region's dominance, with the U.S. Census Bureau reporting that 60% of businesses used cloud services in 2023, reflecting deep enterprise reliance on cloud-native workflows. Asia-Pacific is expected to grow at the fastest rate, driven by large-scale digitalization, rising public cloud spending, and rapid 5G rollout. IDC notes that APAC's public cloud spending is growing above 25% annually, outperforming all regions. Europe, Latin America, and the Middle East & Africa contribute steadily: Europe benefits from GDPR-driven sovereign cloud initiatives; Latin America gains from cloud region expansions by AWS and Google; and MEA leverages digital-government programs and rising data-center investments.
U.S. Cloud Computing Market- Country Insights
The U.S. remains the world's most advanced cloud market, powered by large enterprises, hyperscalers, and federal digitization mandates. According to the U.S. National Science Foundation (NSF), federal cloud spending surpassed $12 billion in FY 2024, with agencies accelerating migration under the Federal Cloud Computing Strategy ("Cloud Smart"). The country's strong AI and SaaS ecosystem, combined with more than 800 hyperscale data centers (Synergy Research Group), enables unmatched scalability and service availability.
Growth is also driven by widespread cloud adoption across BFSI, healthcare, and manufacturing, supported by regulations such as HIPAA and FedRAMP. With ongoing investments by AWS, Microsoft Azure, and Google Cloud in new availability zones, the U.S. continues to strengthen its leadership in cloud infrastructure, AI workloads, zero-trust security architectures, and industry-specific cloud platforms.
Demand for generative AI, hybrid architectures, and data-sovereignty controls is concentrating investment into scalable, secure cloud services. Major players of the market include, AWS, Microsoft, Google, Alibaba Cloud, Oracle, IBM (Red Hat), Tencent Cloud, and Huawei Cloud. Across the board, providers are investing heavily in data-center modernization, custom accelerators, and automation to improve performance and cost efficiency. A common strategic push includes the development of vertical industry clouds, expansion of edge and hybrid-cloud ecosystems, deeper open-source integration, and broadening of managed service portfolios to simplify enterprise migration. Partnerships with telecom operators, SaaS vendors, and regional service providers are also intensifying to accelerate global coverage and enterprise adoption.
In March 2025, Hitachi Energy announced a multi-year strategic collaboration with AWS to advance cloud computing-driven innovation for energy systems. The partnership will deliver AI-enabled solutions such as Vegetation Manager on AWS, using cloud computing, satellite imagery, and weather data to improve grid reliability, accelerate digital transformation, and support global energy-transition goals.
In May 2025, Microsoft launched its first cloud computing region in Malaysia - "Malaysia West" - featuring three availability zones in Greater Kuala Lumpur. This infrastructure will offer Azure, Microsoft 365, and analytics services with local data residency and lower latency, supporting the country's AI and cloud ambitions. The initiative is backed by a US$2.2 billion investment, projected to generate US$10.9 billion in revenue by 2028 and create more than 37,000 direct and indirect jobs.
In September 2025, SAP has introduced its Sovereign Cloud in India, enabling regulated industries and government bodies to retain complete control over their data while leveraging cloud computing and AI. Built on a full-stack, open-source framework, this sovereign cloud supports infrastructure, platform, applications, and AI workloads. Customers can deploy it in their own data centers or use a hyperscaler-based model via AWS.