The worldwide infrastructure as a service (IaaS) market grew 22.5% in 2024, reaching $171.8 billion, according to Gartner Inc., a research and consulting company. Amazon remained the top IaaS provider, followed by Microsoft, Google, Alibaba, and Huawei.
“As enterprises continue to seek greater flexibility, improved resilience and optimized performance, there is sustained demand for cloud migration and modernization services,” said Hardeep Singh, principal analyst of Gartner. “Enterprises want to transform their IT infrastructure by leveraging multiple platforms for AI and prioritizing modernization by migrating existing workloads to the cloud.”
In 2024, the top five IaaS providers accounted for 82.1% of the market. Amazon led with $64.8 billion in revenue and a 37.7% market share, followed by Microsoft with 23.9%. Google, Alibaba Group, and Huawei kept their positions year-over-year.
Singh added that enterprises are also deploying cloud-native applications across different environments. This trend is supported by demand for flexibility in data residency and sovereignty, as organizations move to the cloud while keeping control over their data and operations.
“Cloud providers are investing heavily in AI infrastructure and capabilities to become leaders in the rapidly evolving AI-optimized IaaS market. They expect that AI will become a much larger revenue contributor in the future, even though it currently remains a relatively small slice of their overall revenue within the IaaS space,” Singh said.
He noted that emerging AI-optimized IaaS offerings from nonhyperscalers, or GPU as a service (GPUaaS) providers, though still nascent, have also played a key role in addressing immediate capacity requirements by offering flexible, high-performance compute on demand.