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The Europe, Middle East, and Africa (EMEA) public cloud services (PCS) market, including infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS), is projected to generate $203.0 billion in revenue for 2024. That's according to the latest Worldwide Semiannual Public Cloud Services Tracker from International Data Corporation (IDC), which forecasts that the EMEA PCS market will reach $415.1 billion in 2028, representing a compound annual growth rate (CAGR) of 20.0% for the 2023–2028 period.
SaaS, encompassing both SaaS – Applications and SaaS – System Infrastructure Software (SIS), continues to be the largest cloud deployment category, and is projected to make up 64.4% of the total PCS market in 2024. Due to its size and maturity, SaaS is experiencing the slowest rate of growth among the different cloud deployment models. In contrast, PaaS is the fastest-growing segment, with a projected CAGR of 29.3% for 2023–2028 forecast period, followed by IaaS with a CAGR of 21.6%.
The increased adoption of AI, particularly generative AI (GenAI), combined with ongoing investments in cloud datacenters by global cloud service providers across EMEA, is driving the overall demand for public cloud services. Both end users and technology providers are investing in AI-ready infrastructures and platforms. Global tech companies will continue to invest in GenAI, embedding more features and functionalities into their existing portfolios. This will create additional opportunities for growth in the IaaS and PaaS markets, boosting adoption of such services across the EMEA region.
"As enterprises adopt GenAI to gain a competitive advantage, the need for scalable, on-demand infrastructure continues to rise," says Manish Ranjan, research director for software and cloud at IDC EMEA. "High-performing compute resources, such as GPUs and other accelerated computing, are essential for running AI/GenAI workloads. Public cloud service providers are becoming the primary entry point, offering the necessary infrastructure to support GenAI initiatives without significant up-front investments."
From a sub-regional perspective, Western Europe dominates the EMEA market, accounting for over 80% of its revenue, followed by the Middle East and Africa (MEA) and Central and Eastern Europe (CEE). Germany, the U.K., France, and Italy remain the key destinations for cloud investments. However, global hyperscalers like Google, AWS, Microsoft, and Oracle are aggressively expanding their cloud regions in Finland, Greece, Denmark, the Netherlands, Belgium, Austria, and Spain, boosting cloud adoption across Europe. Similarly, MEA, the fastest-growing sub-region for IaaS, is a hotspot for global cloud providers, with AWS, Microsoft, Google, Oracle, and Alibaba establishing cloud regions in Saudi Arabia, the UAE, South Africa, Qatar, and Bahrain, and planning expansions in Kuwait, Morocco, Kenya, and other tier 2 markets.
