The world is moving fast, and cloud computing is at the center of this shift, fueled by the explosive adoption of AI. AI is reshaping how businesses operate, optimize, and scale their systems. From smarter IT operations to faster decision-making, companies are leveraging AI to tackle challenges with precision and efficiency.
This transformation is driving a remarkable increase in cloud investments. According to Gartner, global cloud spending will grow 21.5% by 2025, soaring from nearly $600 billion in 2024 to an impressive $723 billion. It’s a sign that businesses are doubling down on the cloud to stay competitive and future-ready.
SaaS and infrastructure/platform services lead spending trends
Cloud-based applications and software services, known as SaaS, are leading the pack in cloud spending. Why? They simplify workflows, improve collaboration, and provide ready-made solutions for businesses looking to scale without massive upfront costs. This segment is growing steadily, with spending expected to rise from just over $250 billion in 2024 to nearly $300 billion in 2025.
But the real accelerators are infrastructure and platform services. These are the tools that power the most complex workloads, from running AI models to supporting enterprise-grade applications. Infrastructure services are forecasted to grow 25% year-over-year, while platform services aren’t far behind at 22% growth. Companies are flocking to these solutions because they take the headache out of managing IT infrastructure, letting them focus on innovation instead of maintenance.
Multicloud adoption—where organizations use multiple cloud providers for different tasks—is another factor driving this surge. It gives businesses the flexibility to choose the best tools for each workload while avoiding over-reliance on a single vendor.
AI-driven workloads and genAI impact cloud infrastructure
Platforms powered by large language models and other AI tools are transforming how businesses function. Hyperscaler platforms—think Amazon Web Services, Microsoft Azure, and Google Cloud—are now the go-to marketplaces for AI-powered applications. They offer unparalleled computational power, letting businesses deploy advanced AI solutions with ease.
This surge in AI-driven workloads is creating unprecedented demand for robust cloud infrastructure. Gartner’s numbers tell the story: by 2025, combined spending on cloud infrastructure and platform services (CIPS) will grow 24% to surpass $300 billion. These services are becoming the engine for AI innovation, letting companies crunch massive datasets, generate insights, and deliver real-time solutions to their customers.
“Businesses across industries are using genAI to create everything from personalized customer experiences to streamlined supply chains. The demand for cloud platforms capable of supporting these AI ambitions is only going to grow.”
Hybrid and multicloud ecosystems see rapid expansion
Hybrid cloud ecosystems are redefining how businesses think about IT infrastructure. No longer confined to either on-premises systems or public clouds, companies are blending the best of both worlds. This hybrid approach is perfect for organizations that need to balance legacy systems with modern cloud solutions.
What’s driving this growth? Industry-specific tools, particularly those powered by generative AI, require a level of flexibility and customization that hybrid systems can deliver. Businesses can tailor solutions to their needs without overhauling their existing infrastructure.
Multicloud strategies are another big piece of the puzzle. Using multiple cloud providers, companies can optimize for cost, performance, and risk management. Gartner predicts that by 2027, 90% of organizations will adopt hybrid cloud models. This is quickly becoming the standard for businesses that want to stay agile in an ever-changing tech world.
The bottom line is clear: whether it’s hybrid, multicloud, or generative AI, cloud ecosystems are evolving to meet the demands of modern enterprises. Businesses that embrace these technologies will be better positioned to outpace their competition and seize new opportunities in a digital-first world.
