Cloud Market Share in 2025: GenAI Spurs Growth but Does Not Promise Vendors Long-term Gains

2025 Predictions is a series of special reports examining market trends and business changes TBR expects in the coming year for AI PCs, cloud market share, digital transformation, GenAI, ecosystems and alliances, and 6G

Top Predictions for Cloud Market Share in 2025

1. Scale, innovation and even repatriation will moderate cloud market growth in 2025
2. Microsoft will narrow the gap with AWS in IaaS & PaaS market share, en route to leadership in 2027
3. SaaS vendors will shrug off growing GenAI disillusionment, focusing on the long term by prioritizing GenAI agents within their development strategies

 

The GenAI opportunity is developing but does not ensure future cloud market growth

The revenue generated from generative AI (GenAI) offset some of the impact of cost-saving and expense-reduction efforts that defined the IT and cloud market in 2024. We expect some of that luster to fade in 2025, however, as the lack of a clear ROI from GenAI solutions will be a sticking point that slows investment in the coming year. The long-term GenAI opportunity is still sizable and customer interest remains strong, but the coming year will be a transition period for end customer investment in the technology.
 

 
At the same time, the leading hyperscalers will use 2025 to expand delivery capabilities and secure their position in the AI market for the long term. We expect double-digit growth in capex spending from the leading vendors like Amazon Web Services (AWS), Microsoft and Google. This dichotomy of accelerated vendor investment and more restrained customer spending will define the coming year.
 
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