Public Cloud Spending to Surpass $1 Trillion in 2026

Global spending on public cloud services is forecast to surpass $1 trillion in 2026, growing over 21%, and is expected to double by 2029, according to IDC. Growth is driven by enterprise-wide application modernization, accelerating adoption of AI-enabled platforms, and rising demand for secure, scalable digital infrastructure across industries. 

Growth of public cloud services is led by the continued expansion of Software-as-a-Service (SaaS) and a sharp acceleration in Platform-as-a-Service (PaaS) adoption as organizations scale AI development, data platforms, and cloud-native application environments. SaaS will remain the largest public cloud deployment category in 2026, accounting for more than half of global spending. Looking at the largest secondary markets, investments are concentrated in IaaS, Enterprise Resource Management (ERM), and security software, reflecting enterprise priorities around cloud migration and cybersecurity, and core modernization.

PaaS will be the fastest-growing deployment model, expanding by over 37% year-over-year in 2026. Growth is driven by rising demand for artificial intelligence (AI) platforms and application development software, as organizations adopt cloud-native environments to support generative and agentic AI, real-time analytics, and data-intensive workloads.

Banking, software and information services, and retail will be the three largest public cloud–spending industries in 2026. The next five largest industries — Professional and Personal Services, Capital Markets, Media and Entertainment, Telecommunications, and Healthcare Providers — will account for more than a quarter of global spending. 

“Public cloud spending will continue to grow as cloud migration remains central for agility, resilience, and efficiency,” said Andrea Minonne, research manager at IDC. “In aerospace and defense, higher budgets and rising geopolitical tensions are driving demand for secure, cloud-based platforms supporting advanced analytics and mission-critical systems, with increased defense spending across NATO members and escalating tensions in the Middle East accelerating investment in AI-enabled and security-focused cloud environments.”