IT industry analyst, International Data Corporation (IDC), is predicting that public cloud services spending in Europe will total $171 billion in 2024 and reach almost $298 billion by 2027, recording a five-year (2022-2027) compound annual growth rate (CAGR) of 21%. Platform-as-a-service (PaaS) will continue to grow the fastest in the long run, fuelled by the generative AI (GenAI) hype, which will drive cloud-based investments in AI software services.
► European market will be worth almost $300 billion in 2027
► GenAI ‘hype’ will help fuel investment
► Banking, retail, and telecomms remain biggest spenders
While European industries continue to experience headwinds, the 2024 outlook looks more promising. Inflation is softening and a downward trend across Europe is expected to accelerate, despite localised challenges. ‘Despite macroeconomic challenges, cloud spending will continue to grow across all industries, supported by strong drivers such as GenAI, CloudOps, digital sovereignty, and sustainability,’ said Andrea Minonne, research manager at IDC UK. ‘As the economy remains volatile, it’s important for cloud providers to stay on top of industry trends by understanding the dynamics and priorities of different vertical markets.’
The figures come from IDC’s Worldwide Software and Public Cloud Services Spending Guide.
Banking, retail, and telecommunications will continue to be the top-spending industries in public cloud in 2024, accounting for almost a third of the overall market value. The oil and gas sector will be one of the fastest-growing in the short term.
Further out though, software and information services will have the highest value CAGR in Europe, at 25% over the five-year period. While challenges in the tech sector are not over yet, GenAI will be a focal point and will support cloud investments. IDC said that by leveraging the capabilities of GenAI, tech companies can streamline processes rapidly and efficiently, supporting the existing workforce and the allocation of more time to strategic activities.
