Amazon, Microsoft, and Google strengthen their dominance, while alternative GPU providers gain ground with flexible, high-performance offerings.
The global Infrastructure as a Service (IaaS) market reached $171.75 billion in 2024, with a year-over-year growth of 22.5%, according to Gartner. This surge, which surpasses initial forecasts, is closely tied to the rising demand for infrastructure supporting artificial intelligence and the rapid pace of migrating and modernizing systems to the cloud.
In terms of providers, Amazon Web Services (AWS) maintains its leadership with $64.80 billion in revenue and a 37.7% market share, followed by Microsoft Azure with 23.9%, and Google Cloud with 9%. Alibaba Group holds 7.2%, and Huawei 4.1%, completing the top five, which together account for 82.1% of the global market.
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AI as the driving force of the next wave of growth
The rise of generative AI and GPU-intensive workloads has accelerated the adoption of cloud services optimized for AI. Gartner senior analyst Hardeep Singh states:
> “Cloud providers are making massive investments in AI infrastructure, anticipating it will become a much more significant revenue driver in the coming years, despite still being a fraction of the overall IaaS business today.”
This investment is reflected not only in the expansion of hyperscale data centers but also in the availability of cutting-edge GPU instances, low-latency networks, and high-performance storage, geared towards training and deploying large-scale AI models.
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Migrating and modernizing: strategic priorities
The report highlights an increasing trend of companies migrating legacy workloads to modern cloud environments to achieve greater flexibility, resilience, and optimized performance. This process includes adopting cloud-native applications deployed in hybrid and multi-cloud setups, making data residency and digital sovereignty central to their strategies.
Singh notes that this transition also involves a cultural shift: “Organizations want to transform their IT infrastructure by leveraging multiple AI platforms and modernizing their systems while maintaining control over their data and operations.”
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Emerging role of alternative GPU providers
Although cloud giants dominate the market, Gartner observes a rising trend of non-hyperscale providers offering GPU-as-a-Service (GPUaaS). These emerging players, still in early stages, are crucial for meeting immediate capacity needs by providing on-demand high-performance computing with more flexible contractual arrangements than the major providers.
This trend opens doors for new competitors specializing in AI workloads, high-performance computing (HPC), and complex data analysis, attracting companies seeking cost-effective or tailored solutions.
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IaaS Market Ranking 2024
(Revenue in millions USD and market share)
| Position | Provider | 2024 Revenue | % Share | 2023 Revenue | % Share | Growth % |
|---|---|---|---|---|---|---|
| 1 | Amazon | 64,804.9 | 37.7% | 54,664.0 | 39.0% | 18.6% |
| 2 | Microsoft | 41,099.3 | 23.9% | 32,205.7 | 23.0% | 27.6% |
| 3 | 15,519.5 | 9.0% | 11,458.2 | 8.2% | 35.4% | |
| 4 | Alibaba Group | 12,444.9 | 7.2% | 11,129.1 | 7.9% | 11.8% |
| 5 | Huawei | 7,082.2 | 4.1% | 5,979.7 | 4.3% | 18.4% |
| — | Others | 30,803.7 | 17.9% | 24,767.5 | 17.7% | 24.4% |
| Total | — | 171,754.6 | 100% | 140,204.2 | 100% | 22.5% |
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Key Trends
- Market concentration: The top five providers control over 80% of the global business.
- Strong growth for Google Cloud: A 35.4% annual increase driven by AI and data analytics.
- Sovereign demand: Increased interest in solutions complying with local data protection regulations.
- Strategic multicloud adoption: Greater diversification to avoid dependence on a single provider.
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Outlook for 2025 and beyond
Gartner predicts that IaaS adoption will continue to accelerate, especially in sectors with high AI processing demands, such as automotive, biotech, finance, and public administration. Providers will need to balance capacity, cost, and regulatory compliance, with AI-optimized cloud services emerging as a dominant theme.
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FAQs
1. What is IaaS, and why is it growing so rapidly?
IaaS is a cloud service model providing on-demand IT infrastructure. Its growth is driven by the need for flexibility, scalability, and AI capability demands.
2. What role will AI play in the future of IaaS?
AI will be a key revenue driver, fueling investments in specialized hardware like GPUs and high-performance networking.
3. Who currently leads the IaaS market?
Amazon Web Services leads with 37.7%, followed by Microsoft Azure and Google Cloud.
4. What opportunities exist for new competitors?
Specialized providers focusing on GPUaaS and demanding workloads have room to grow, offering more flexible and customized solutions.
via: Gartner