Gartner tweaks cloud spending forecast for 2024 – here’s what changed

  • Gartner increased its overall forecast for 2024 public cloud services spending

  • However, it reduced its prediction in one key category: IaaS

  • We've got exclusive charts that break it all down

Once again Gartner has looked into its crystal ball and offered up its latest take on where the cloud market will go in the coming year. The takeaway? Spending in most categories will increase more than expected, but Cloud System Infrastructure Services (IaaS) revenue will fall short of Gartner’s original expectation.

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“Cloud has become essentially indispensable,” Gartner VP Analyst Sid Nag said in a statement. “However, that doesn’t mean cloud innovation can stop or even slow. The tables are turning for cloud providers as cloud models no longer drive business outcomes, but rather, business outcomes shape cloud models.”

Back in April, Gartner originally predicted global public cloud end-user services spending would hit $724.6 billion in 2024. But that report included a category – Cloud Management and Security Services – not wrapped into its updated forecast. Without that category, the April spending forecast would have totaled $672.7 billion.

Now, though, Gartner expects about $6 billion in additional revenue, for a total of $678.8 billion.

Gartner Nov 2024 cloud spending forecast by segment
Chart by Silvelrinings based on Gartner data. (Gartner/Silverlinings)

What changed? Well, the analyst firm increased its 2024 spending forecast in three out of five categories compared to the 2024 numbers it floated in April. Cloud Application Infrastructure Services (PaaS) is now expected to bring in an extra $6.1 billion, Cloud Application Services (SaaS) an additional $11.7 billion and Cloud Business Process Services (BPaaS) an extra $1.9 billion.

Gartner revised its figures downward in the remaining two categories. Cloud Desktop-as-a-service (DaaS) is now expected to get $400 million less than originally anticipated. And though it will be the fastest-growing segment, Cloud System Infrastructure Services (IaaS) is now only expected to bring in $182.2 billion in 2024, compared to its April estimate of $195.4 billion.

Gartner IaaS forecast revisions
Chart by Silverlinings based on Gartner data. (Gartner/Silverlinings)

According to Gartner's most recent Public Cloud Forecast report, there are two major trends which drove the changes to its forecast: what it dubbed "change fatigue" and – perhaps predictably – artificial intelligence.

"Change fatigue among CIOs is most often manifesting as hesitating to engage or lengthening negotiations for new projects and initiatives. These delays can also be attributed to a new wave of pragmatism, capital restrictions or margin concerns," the report explained. "In extreme cases, organizations are resorting to cost-cutting measures, such as reducing headcount and cutting discretionary spending. Organizations taking a more pragmatic approach are simply shifting the emphasis of ongoing IT projects toward cost control, efficiencies and automation, while curtailing IT initiatives with longer ROIs. The overall effect is to have downward pressure on overall IT spending, particularly new spending.”