Gartner forecasts worldwide public cloud end-user spending to surpass $675.4 billion (£531.6bn) this year.

End-user spending on public cloud services is projected to see a 20.4% increase to about £531.6bn, up from about £441.6bn. This growth is primarily attributed to advancements in generative AI (GenAI) and the modernisation of applications.

The public cloud market’s expansion underscores the critical role of cloud tech in the digital era, propelled by GenAI advancements and the ongoing need for modernised applications.

“The continued growth we expect to see in public cloud spending can be largely attributed to GenAI due to the continued creation of general-purpose foundation models and the ramp up to delivering GenAI-enabled applications at scale,” said Sid Nag, vice president analyst at Gartner.

“Because of this continued growth, we expect public cloud end-user spending to eclipse the one trillion dollar mark before the end of this decade.”

All segments of the cloud market are set to experience growth in 2024. However, Infrastructure-as-a-service (IaaS) is expected to see the highest increase in end-user spending at 25.6%, followed closely by platform-as-a-service (PaaS) at 20.6%.

Nag highlighted the rapid growth in IaaS, attributing it to the GenAI revolution. “The need for infrastructure to undertake AI model training, inferencing and fine tuning has only been growing and will continue to grow exponentially and have a direct effect on IaaS consumption,” he explained.

Despite the strong growth in cloud infrastructure and platform services, software-as-a-service (SaaS) remains the largest segment in terms of end-user spending. SaaS spending is projected to grow 20% to about £194.6bn in 2024.

“SaaS spend is driven by applications being modernised by independent software vendors to run in a SaaS-based consumption model,” said Nag.

“Organisations continue to increase their usage of cloud for specific use cases such as AI, machine learning, Internet of Things and big data which is driving this SaaS growth.”