• The generative AI (GenAI) boom has added fuel to the cloud services fire
• Demand for cloud services is growing at an accelerated pace
• The market was worth more than $330bn in 2024, according to Synergy Research

The global market for cloud infrastructure services grew by $60bn, more than 22.2%, to be worth $330.4bn in 2024, “a testament both to the impact of GenAI and the strength of the underlying cloud market,” according to market research firm Synergy Research Group, which tracks the cloud services and datacentre sector closely. 

As the chart above shows, demand for cloud infrastructure services – comprising infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS) and hosted private cloud services – has continued to grow at a rapid pace during the past few years. In financial terms, the global market has grown by a staggering $102bn during the past two years alone.

It’s no coincidence that ChatGPT was launched just over two years ago: Generative AI (GenAI) services and technology have helped to propel the market since then, noted Synergy in this press release. 

For such a big market that is an impressive acceleration of growth,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “How much of that was down to AI? 

“ChatGPT was launched at the end of 2022 and helped to bolster service development through 2023 and then boost more aggressive market growth through 2024,” noted John Dinsdale, a chief analyst at Synergy Research Group. “Our assessment is that since ChatGPT was launched, GenAI has been responsible for at least half of the increase in cloud service revenues. That has come from either newly launched GenAI/GPU services or from AI-driven improvements to existing cloud services. The technology might be expensive, but it is creating new services that are bringing in tens of billions of dollars for the cloud providers,” added Dinsdale. 

In the fourth quarter of 2024, enterprise spending on cloud infrastructure services was $90.6bn worldwide, up by $17bn, or 22% year on year. Amazon Web Services (AWS) continues to be the clear market leader, with a share of 30%, but the Synergy Research team notes that Microsoft Azure (21% market share) and Google Cloud (12%) grew their cloud services businesses at a faster pace. 

“Among the tier two cloud providers, those with the highest year-on-year growth rates include CoreWeave, Oracle, Snowflake, Cloudflare and Databricks,” noted Synergy Research. “Notably, CoreWeave has now broken into the top 20 ranking of cloud providers thanks to its AI and GPU services,” it added. 

The cloud services market is recording strong growth in all regions of the world, but when measured in local currencies, the major countries with the strongest growth in the fourth quarter included Brazil, Spain, Italy, India and Japan, all growing at rates above the worldwide average. The US remains by far the largest cloud market, with its scale far surpassing the whole APAC region. In Europe the largest cloud markets are the UK and Germany, but the big markets with the highest growth rates were Ireland, Spain and Italy.

- Ray Le Maistre, Editorial Director, TelecomTV