Cloud computing has become a dominant force in enterprise IT and shows no signs of slowing down. According to the latest market research, global revenue from public cloud services is forecast to grow by nearly 80% between 2023 and 2028, reaching over $1.1 trillion.1
Behind these staggering numbers lies a technology area undergoing rapid evolution. Multi-cloud environments now prevail across organizations of all sizes and industries. Meanwhile, cloud providers race to roll out new infrastructure, platforms, tools and specialized services – from machine learning to blockchain – delivered from hyperscale data centers.
This article analyzes recent statistics pointing to the current state and future directions of cloud computing.
Cloud Market Sizing and Growth Projections
Let‘s start by reviewing some key figures regarding the total cloud market outlook. According to Gartner, worldwide end-user spending on public cloud services is projected to reach $595 billion in 2024, an increase of 20.7% from 2022.2 Software-as-a-service (SaaS) constitutes the largest and fastest growing segment. However, all categories – including infrastructure (IaaS), platform (PaaS) and business process (BPaaS) services – are forecast to grow at double-digit rates through 2026.
When segmented by region, North America continues to account for the majority of cloud spending at over 46%.3 But Asia-Pacific and EMEA represent growing markets. In 2024, China‘s cloud infrastructure market alone could reach $30 billion.4
Total cloud spending figures also obscure important changes happening across industries. While tech companies pioneered the public cloud model, other verticals are now aggressively moving workloads off on-premises data centers. The worldwide ratio of cloud-based to traditional on-prem IT infrastructure spending shifted from 54:46 in early 2022 to 60:40 by mid-2023.5 Manufacturing, government and healthcare lead industries increasing cloud budgets.
Notably, small and mid-size businesses (SMBs) are just as eager to realize cloud benefits like flexibility, scalability and subscription-based pricing. IDC predicts SMB cloud spending to grow at 17% CAGR from 2021-2025 compared to 15% for larger enterprises.6 The as-a-Service consumption model clearly resonates across organization types.
Multi-Cloud Adoption Trends
As cloud usage diversifies, so do the underlying provider strategies. Multi-cloud and hybrid cloud architectures now prevail. According to Flexera‘s 2023 State of Cloud Report, more than 93% of responding enterprises have a multi-cloud strategy while 87% currently use on-premises and public cloud platform combinations.7
This reflects certain realities about contemporary cloud consumption, including:
- No single cloud vendor provides the best service across all functionality areas
- Workloads often span cloud and on-prem resources
- Many organizations inherit multi-cloud environments through mergers and acquisitions
- Compliance, risk mitigation and cost optimization support cloud diversity
The downside is more complex system interconnections, data integration challenges and skill gaps. When asked about difficulties, 63% of Flexera survey respondents cited managing across cloud platforms.8 Still, the flexibility afforded by blending cloud services appears to outweigh integration hurdles.
Large managed service providers (MSPs) now play an important role here – offering professional and managed services to deploy, govern and optimize complex cloud environments. Competency across cloud platforms has become prerequisite for any IT service partner.
Cloud Security and Compliance
Surging cloud adoption does not diminish cybersecurity concerns and compliance burdens. If anything, distributing infrastructure and data across services sharpens focus on these areas for most CIOs.
High profile cloud breaches still occur, often tracing back to customer misconfigurations not provider vulnerabilities. Nevertheless, shared responsibility for cloud security remains perplexing to many businesses. According to recent surveys, protecting data and workloads in the cloud represents a significant challenge area for somewhere between 75% and 81% of cloud customers.9 Heterogeneous environments certainly amplify cloud security management pain points.
Likewise, certifying compliance across cloud platforms leaves much room for improvement. Just 51% of respondents in one study were completely confident their organization‘s multi-cloud resources and workloads complied with external regulations and internal policies.10 Data residency restrictions pose problems for global companies. Harmonizing identity, access and audit controls across cloud services remains stubbornly difficult.
In response, infrastructure providers dedicate enormous resources toward advanced security and compliance feature development. Concurrently, a thriving ecosystem of third-party tools promises to simplify cloud governance tasks through centralized visibility, access controls and DevSecOps automation. Expect managing cloud security and compliance burdens to fuel booming technology areas like cloud security posture management (CSPM), cloud infrastructure entitlement management (CIEM) and cloud workload protection platforms (CWPP) in coming years.
Cloud Cost and Consumption Management
For all its technical advantages, cloud computing introduces new cost management complexities. Cloud bills frequently spiral out of control without proper visibility into consumption and rightsizing discipline. In 2023 surveys, about 40% of customers see controlling cloud expenses as a top challenge – more than data security or performance.11
In response, organizations increasingly seek solutions to forecast expenditures more accurately, establish budgets caps, alert on anomalies and optimize deployment patterns. Major cloud providers now push offerings such as AWS Cost Explorer and Azure Cost Management alongside third-party FinOps tools.
Consumption monitoring capabilities also help identify unused cloud resources for shut down. IDC estimates enterprises waste 30% of cloud spending on "zombie" instances and storage.12 So while cloud theoretically supports usage-based pricing, putting guardrails around consumption remains imperative.
Emergence of Specialized Cloud Services
Thus far focusing largely on compute and storage services, infrastructure providers now race to deliver more advanced functionality targeting enterprise digital transformation initiatives:
- Cloud-Native Capabilities – As cloud architecture reshapes application strategies, all major providers add container services plus Functions-as-a-Service (FaaS) and microservices tools
- Data and Analytics – Cloud data lakes, data warehouses and databases expand capabilities while vendors introduce ML Ops products for embedding and managing AI models
- Industry Solutions – Segment-specific capabilities come online aiming to accelerate modernization in financial services, healthcare, retail and other key verticals
- Edge and 5G Solutions – Joint telecommunications and cloud solutions help customers build low-latency applications across highly distributed environments
This expansion increases cloud stickiness while injecting new competition dynamics across the ecosystem. Suddenly, Amazon Alexa competes with Google Assistant for conversational AI workloads as both leverage cloud machine learning behind the scenes. 5G network operators team with hyperscale data centers to attack edge computing opportunities.
The introduction of industry-tailored cloud solutions also promises to accelerate adoption outside the technology sector. In this model, global solutions integrator partnerships become pivotal to customer success.
Key Takeaways and Predictions
In synthesizing the latest cloud computing statistics and trends, a few key takeaways stand out:
- Global cloud spending will continue expanding at a 17% CAGR through 2027.13
- Multi-cloud adoption accelerates as customers combine services seeking best-of-breed solutions.
- Cloud data integration, security and cost control rank among top customer challenges.
- Providers rapidly expand offerings with new functional capabilities, analytics tools, industry solutions and edge computing options.
- Highly distributed application architectures dictate closer cloud, networking and systems integrator partnerships.
For cloud computing, dizzying growth and change remain central themes with no signs of letting up. As hyperscale data centers become the prevailing computing paradigm globally, IT decision makers face an expanding menu of infrastructure and service options to evaluate. Navigating this complex landscape demands a balanced combination of technical expertise and business acumen bound together by overarching cloud governance and automation capabilities.
