Infrastructure as a Service (IaaS) Market Report 2025

The infrastructure as a service (IaaS) market size has grown rapidly in recent years. It will grow from $154.39 billion in 2024 to $171.96 billion in 2025 at a compound annual growth rate (CAGR) of 11.4%. The growth in the historic period can be attributed to evolving workforce dynamics, rise of devops and agile practices, strategic shift to outsourced it infrastructure, globalization and market expansion, disaster recovery and business continuity.

The infrastructure as a service (IaaS) market size is expected to see rapid growth in the next few years. It will grow to $276.81 billion in 2029 at a compound annual growth rate (CAGR) of 12.6%. The growth in the forecast period can be attributed to digital transformation initiatives, enhanced security measures, focus on sustainable infrastructure, hybrid and multi-cloud adoption, AI and machine learning integration. Major trends in the forecast period include serverless computing adoption, containerization and kubernetes, edge computing infrastructure, artificial intelligence (AI) integration, software-defined infrastructure (SDI).

The increasing number of small and medium-sized businesses (SMBs) is expected to drive the growth of the Infrastructure as a Service (IaaS) market in the coming years. SMBs are defined as businesses with personnel and revenue figures that fall below specific thresholds. IaaS providers manage all infrastructure components, which helps reduce maintenance and upgrade costs for these businesses. For example, in November 2023, the U.S. Small Business Administration (SBA), a government agency in the US, reported that small businesses accounted for 99.9% of all businesses in the United States. In 2023, there were 33.3 million small businesses, representing an increase of 4.9 million jobs. Therefore, the growth in the number of small and medium-sized businesses is contributing to the expansion of the IaaS market.

The rapid increase in cloud adoption across various industry verticals, including banking, financial services and insurance (BFSI), government and education, healthcare, IT and telecom, retail, manufacturing, and media and entertainment, is expected to significantly drive the growth of the Infrastructure as a Service (IaaS) market during the forecast period. Many industries are embracing IaaS due to its benefits, such as lower costs, enhanced reliability, and scalability. The banking sector, in particular, has seen a high rate of IaaS adoption, thanks to the considerable advantages of cloud computing, which include data analytics, AI-driven insights using machine and deep learning algorithms, agility, and scalability. Cloud computing enables banking organizations to implement changes and introduce new functionalities swiftly. For example, in January 2023, Google LLC, a US-based technology company, reported that 76% of people utilized the public cloud in 2022, marking a 56% increase from 2021. Additionally, in December 2023, the European Union, an international organization based in the Netherlands, indicated that the percentage of EU businesses purchasing cloud computing services rose by 4.2 percentage points in 2023 compared to 2021. Therefore, the growing adoption of cloud services, driven by the benefits they offer across various industry verticals, is a major factor propelling the growth of the IaaS market.

Prominent companies in the infrastructure as a service (IaaS) market are actively engaged in developing innovative products to enhance their offerings. One such example is the introduction of Watson AIOps by IBM, a renowned US-based technology company. Launched in September 2022, Watson AIOps serves as an AIOps platform and IT operations management solution designed to enable IT operators to integrate AI into their ITOps toolchain. Leveraging traceable AI, Watson AIOps assists teams and stakeholders in building trust in AI-powered recommendations and insights for their mission-critical workloads. The platform provides clear and succinct recommendations and actions, aiding teams in finding solutions swiftly.

Major companies operating in the IaaS market are focusing on the development of distributed cloud services to support various workloads, including generative AI. Distributed cloud computing proves advantageous for businesses by facilitating cost reduction through high-speed data processing, seamless information sharing via the cloud, and minimizing the overall total cost of ownership. Akamai Technologies Inc., a prominent US-based content delivery network (CDN), cybersecurity, and cloud service provider, exemplifies this trend. In February 2023, the company launched Akamai Connected Cloud, a massively distributed edge and cloud computing service, introducing three new enterprise-scale core cloud computing sites across the U.S. and Europe. These initiatives underscore the commitment of major companies to innovation, as they strive to enhance their product offerings in the dynamic field of infrastructure as a service.

In March 2022, Akamai Technologies Inc., a U.S.-based content delivery network (CDN), cybersecurity, and cloud service provider, successfully acquired Linode for $900 million. This strategic move brings together Linode's robust cloud computing capabilities with Akamai's industry-leading edge platform and security services. The combined offering provides businesses with a formidable platform for building, running, and securing applications. Linode LLC, the acquired entity, is a U.S.-based infrastructure-as-a-service (IaaS) platform provider.

Major companies operating in the infrastructure as a service (IaaS) market include Alphabet Inc., Google Inc., Microsoft Corporation, Alibaba Group Holding Limited, Dell Technologies Inc., Tencent Holdings Limited, Amazon Web Services Inc., International Business Machines Corporation, Cisco Systems Inc., Oracle Corporation, Fujitsu Limited, Hewlett Packard Enterprise Company, Savvisa Century Link Company, DXC Technology Company, Vmware Inc., Alibaba Cloud Inc., RedHat Inc., Rackspace Technology Inc., Nutanix Inc., IONOS Cloud Inc., Joyent Inc., Redcentric plc, Linode LLC, MapR Technologies Inc., Mesosphere Inc., ProfitBricks Inc., Mirantis Inc., EMC Corporation, Micronaut Foundation, OpenStack Foundation.

North America was the largest region in the infrastructure as a service (IaaS) market in 2024. Western Europe was the second largest region in the global infrastructure as a service (IaaS) market share. The regions covered in the infrastructure as a service (iaas) market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the infrastructure as a service (iaas) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Infrastructure as a Service (IaaS) is a cloud computing model that provides virtualized computing resources - including servers, storage, and networking - over the internet on a pay-as-you-go basis. This model enables organizations to scale their IT infrastructure without the necessity of investing in physical hardware.

The primary types are public, private, and hybrid clouds. Public clouds are internet-based solutions offered by service providers, shared among organizations and accessed through subscription or pay-per-use models. Industries utilizing IaaS include BFSI, government, healthcare, IT, telecom, retail, manufacturing, media, and more. IaaS serves various operations such as managed hosting, storage, disaster recovery, compute, network, content delivery, and high-performance computing. It's commonly used by both small-medium enterprises (SMEs) and large enterprises.

The infrastructure as a service (IaaS) market research report is one of a series of new reports that provides infrastructure as a service (IaaS) market statistics, including infrastructure as a service (IaaS) industry global market size, regional shares, competitors with infrastructure as a service (IaaS) market share, detailed infrastructure as a service (IaaS) market segments, market trends and opportunities, and any further data you may need to thrive in the infrastructure as a service (IaaS) industry. This infrastructure as a service (IaaS) market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The infrastructure as a service (IaaS) market includes revenues earned by entities by providing computer infrastructure on-demand through an internet platform. IaaS refers to providing access to computer infrastructure through networked servers. Establishments providing IaaS host hardware, software, servers, storage and other infrastructure components for their users. These components include networking features, computer hardware, space for data storage, system maintenance, backup and resiliency planning. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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