How much are businesses spending on the cloud in 2025?

Simon Edward • 22 February 2025

Cloud computing costs are set to rise in 2025. Are you paying too much? Join us as we explore the facts.

There was a time when "the cloud" was something that ran parallel to day-to-day business life. It was a tool used for specific purposes in conjunction with on-premises hardware.

Today, the cloud is business life. Everything from meetings to customer-facing apps to file storage to hybrid working depends on cloud solutions.

So, it's no surprise that cloud spending is a source of keen interest and keen worry for enterprises. It's a keen interest because the business benefits are there for all to see. And it's a keen worry because cloud costs can be complex and unpredictable.

In a dynamic market like cloud computing, unpredictability is a near certainty. The cloud is a constantly shifting landscape – just look at the spanner generative AI has recently thrown into the works. This leads to the constant question: how can you get your budget to line up with your cloud goals?

It's all about cloud cost optimisation, a set of tools and resources used to make your cloud infrastructure more efficient.

But before we get into that, how much are businesses spending on the cloud in 2025, exactly?

Facts and figures

IT as a whole is set to grow in 2025 – at least according to the business news outlet Raconteur. It forecasts that 64% of organisations expect to increase their overall IT spend in 2025.

This isn't primarily because the services themselves are getting more expensive. It's because of "increased security concerns" and an "increased emphasis on IT projects".

And, of course, no discussion of cloud computing in 2025 is complete without a mention of AI. 54% of businesses plan to spend more on generative AI in 2025.

Interestingly – but on closer inspection perhaps not surprisingly – there's a gap in perception of IT spend between staff and seniors. Fifty-four percent of staff think their company isn't spending enough on IT compared to 19% of managers and just 15% of directors.

That's IT as a whole – so how about the cloud? While sources point to an upward trend, it's not a single straight line going up and up but more of a mixed picture.

Technological research firm (and much-mined source of cloud data) Gartner predicts that end-user cloud spending will increase by 21.5% globally to $723 billion in 2025.

But what is "cloud spending"? This isn't as pedantic as it sounds. "The cloud" is a vast global market with many sub-markets. For this reason, TechRadar questions whether Gartner's prediction is quite on the money.

It seems that "Gartner has slowly been pulling categories from its predictions. In 2023, the firm took out cloud management and security services, and [in 2025] business process as a service (BPaaS) has been removed."

What's more, IaaS compute, storage and networking capacity spend are all forecast to be lower than in previous years.

This doesn't mean that Gartner's prediction of growth is unfounded – just that it's a more nuanced picture than an untrammelled rise in cloud spending. As TechRadar points out, "The cloud market is so big that predicting accurately can be extremely difficult, and even minor trends could have a significant knock-on effect."

Whatever the precise facts and figures, it's clear that the rise in AI technologies is driving global cloud spending. It seems as if every enterprise in town wants a piece of the GenAI pie.

Sid Nag, VP analyst at Gartner, has written that "the use of AI technologies in IT and business operations is unabatedly accelerating the role of cloud computing in supporting business operations and outcomes".

TechRadar believes this will lead to an increased focus on "hybrid ecosystems that integrate on-premises systems with hyperscaler infrastructure".

It all adds up – and many businesses suspect they're spending too much on the cloud. Could their hunches be true?

Are businesses paying too much?

Cloud spending in 2025 is a mixed picture. Like any global industry, we're likely to see a mixture of upturns and setbacks, some predictable and some coming out of left field. However things pan out, it's clear that many businesses are going over budget.

Induprakas Keri, senior vice president and general manager of hybrid multi-cloud at Nutanix, tells a familiar tale: mid-market organisations, he says, "which are strapped for IT capability to begin with", often end up with "[a] significant amount of sprawl".

In the world of cloud spending, sprawl is the issue. It's never been easier to spin up servers and applications. Too often, businesses go spin-up-crazy, neglecting to measure and monitor how they're utilising these resources and applications.

What's to be done about this? The answer is cloud cost optimisation.

What is cloud cost optimisation?

IT is like a garden. You set out with a clear vision of how it's going to look. But before you know it, there are weeds in your raised beds, bushes in need of a trim and what looks like Japanese knotweed in your herbaceous borders.

The cloud is no different. The best-laid plans in cloud computing can easily go awry, leading to under-utilised resources, inefficient infrastructure and costly cloud resources.

Cloud cost optimisation is a set of tools and procedures to hack through those weeds and make the cloud more efficient.

It's a complex process that involves limiting expenses, removing over-provisioned resources, procuring more cost-effective cloud services, setting strict budgets, deploying automated tools and optimising capacity.

Sounds like a lot? It is. That's where a cloud computing consulting company like Ascend Cloud Solutions can make a big difference.

How we can help

At Ascend Cloud Solutions, we've managed more than 400 migrations and counting – so we know a thing or two about cloud environments and how to keep budgets under control.

As well as migrating workloads, we offer flexible and cost-effective cloud cost optimisation solutions. Work with us and you'll quickly see your budgets stretch further and your cloud reach new heights of performance.

Interested? Don't hesitate to get in touch to book a free discovery call.

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