The IaaS Boom Continues—And It’s Getting Smarter
In 2024, Infrastructure as a Service (IaaS) didn’t just grow—it ballooned. According to new data from Gartner, the global IaaS market jumped 22.5% year-over-year, hitting a staggering $171.8 billion. The growth confirms what most IT leaders already know: cloud isn’t just the future—it’s the infrastructure backbone of the AI era.
At the top of the heap? No surprises here. Amazon Web Services (AWS) continues its reign, pulling in $64.8 billion in IaaS revenue for a 37.7% market share. Microsoft Azure follows with 23.9%, and Google Cloud, Alibaba, and Huawei round out the top five.
Together, these five players now control over 82% of the global IaaS market. But while the hyperscalers continue to tighten their grip, it’s what’s happening beneath the surface that’s setting the stage for the next wave of disruption.
AI Is the New Battleground
If the last IaaS decade was defined by cost-efficiency and scale, the next one will be dominated by AI-optimized infrastructure.
“Cloud providers are investing heavily in AI infrastructure and capabilities to become leaders in the rapidly evolving AI-optimized IaaS market,” says Hardeep Singh, Principal Analyst at Gartner. The driver? Massive enterprise demand for AI training and inferencing at scale—a need that’s outpacing legacy infrastructure models.
Enter GPU-as-a-Service (GPUaaS). While still nascent, emerging players and non-hyperscaler providers are gaining traction by offering on-demand, high-performance compute tailored for AI workloads. These flexible GPUaaS offerings are increasingly used to fill immediate capacity gaps, especially as generative AI workloads surge across industries.
And hyperscalers aren’t sitting still. Microsoft, Amazon, and Google have all ramped up AI-specific infrastructure investment, including custom silicon and LLM-tuned services. The race isn’t just for cloud dominance—it’s for AI infrastructure supremacy.
Enterprises Are Chasing Agility and Sovereignty
Beyond AI, enterprises continue to push hard on cloud modernization and migration. According to Singh, the IaaS boom is largely driven by “a demand for greater flexibility, improved resilience, and optimized performance.”
Organizations are prioritizing cloud-native architectures, refactoring legacy apps, and rolling out multi-cloud and hybrid environments that give them more control over data residency and sovereignty.
“Enterprises want to transform their IT infrastructure by leveraging multiple platforms for AI,” Singh notes. “They’re also deploying cloud-native applications across diverse environments.”
This reflects a broader trend: enterprises don’t just want cloud; they want strategic cloud—configurable, sovereign, and AI-ready.
The Market Power Plays
2024 Top IaaS Providers (by Revenue & Market Share):
| Rank | Provider | Revenue (USD) | Market Share |
|---|---|---|---|
| 1 | Amazon | $64.8B | 37.7% |
| 2 | Microsoft | ~$41B | 23.9% |
| 3 | Not Disclosed | Estimated ~10% | |
| 4 | Alibaba | Not Disclosed | Estimated ~6% |
| 5 | Huawei | Not Disclosed | Estimated ~4% |
Amazon still leads, but the gap is closing, particularly as Azure benefits from Microsoft’s aggressive AI integrations, including Copilot and OpenAI-based services embedded across the stack.
Meanwhile, Google is carving out a niche by positioning itself as the developer-friendly AI platform, banking on its Vertex AI and open-source alignment to attract next-gen startups and researchers.
The Bottom Line
The IaaS market is no longer just about moving workloads to the cloud—it’s about preparing for an AI-first future. With enterprises racing to modernize, and hyperscalers battling it out over GPU turf and custom silicon, expect the IaaS space to remain the epicenter of cloud innovation.
And for enterprise tech leaders, the message is clear: get AI-ready or get left behind.
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