Public Cloud Market Trends

Growth Drivers

• Increasing public cloud spending: The global public cloud market is fundamentally driven by rising IT budgets as organizations prioritize cloud adoption to enhance scalability and support digital transformation. In this regard, Amazon Web Services in November 2025 announced that it is making a substantial investment of up to USD 50 billion to expand AI and high-performance computing infrastructure for U.S. government agencies, which includes nearly 1.3 gigawatts of compute capacity across AWS Top Secret, Secret, and GovCloud regions. It also mentioned that this initiative will provide federal customers with advanced AI services, such as Amazon SageMaker, Bedrock, and NVIDIA-powered infrastructure, thereby enabling faster data analysis, simulation, and decision-making across defense, cybersecurity, healthcare, and scientific research. As organizations worldwide migrate continuously to the cloud for digital transformation, public cloud spending is projected to remain very strong.
• Disaster recovery and business continuity: Public cloud platforms are essential for businesses seeking disaster recovery and business continuity solutions. With their ability to ensure data backup, rapid recovery, and minimal downtime, public cloud services provide cost-effective and scalable alternatives to traditional disaster recovery systems, making them a critical component of global cloud adoption. In September 2022, AWS announced that its AWS Elastic Disaster Recovery (AWS DRS) became available in the Asia Pacific (Jakarta) Region, which provides organizations with fast, reliable recovery for on-premises and cloud-based applications. The firm also notes that this service minimizes downtime and data loss by enabling point-in-time recovery across various infrastructures, including VMware, Hyper-V, and Amazon EC2 instances in different regions or availability zones.
• Data sovereignty and regional cloud localization: The increasing emphasis on data sovereignty and compliance with regional regulations is yet another important growth driver for the public cloud market. Over the recent years, organizations have sought cloud solutions that align with the domestic legal and operational requirements. In this context, both the public and private entities are mandating that sensitive data be stored and processed within national borders, which in turn is prompting cloud providers to expand localized cloud infrastructure. For instance, in September 2024, Avaya launched the Avaya Experience Platform public cloud in India, completing local availability of its unified customer experience platform and enabling enterprises in India to adopt cloud-based CX solutions by also meeting data residency and compliance requirements, hence making it suitable for standard market growth.

Global Public Cloud Market Opportunities and Strategic Investments (2024-2025)

Source: Company Official Press Releases

Challenges

• Concerns about vendor lock-in and interoperability in multi-cloud setups: Transitioning to the cloud necessitates substantial initial costs, which include expenses for data migration, system upgrades, and workforce training. Therefore, these technical complexities can delay deployment and increase project budgets, making it a barrier for small-scale firms. In this context, organizations must carefully evaluate vendor SLAs, service limitations, and compliance requirements, since reliance on a single provider can inherently affect both scalability and innovation. The aspects of regulatory restrictions in certain regions might also complicate multi-cloud adoption. Companies demand flexible exit strategies and interoperability standards to mitigate these risks; hence, these pose a major threat to the global market expansion, considerably.
• High initial migration costs and complexities in legacy system integration: Most of the organizations in the market fear being locked into a single vendor’s ecosystem, which can limit flexibility and increase long-term costs. Vendor-specific tools and proprietary technologies make it challenging when integrating multiple cloud platforms. Also, ensuring interoperability between different providers becomes crucial to avoid data silos, thereby necessitating additional investment in middleware or API management solutions. Moreover, aligning legacy applications with modern cloud architectures necessitates skilled work professionals and proper planning, which in turn can add strain on IT resources. Furthermore, organizations need to adopt phased migration strategies and invest in training to maximize the benefits from the utilization of multi-cloud environments.