IaaS Adoption Surges, Investment Moderates as Organizations Focus on Optimization

Infrastructure as a Service (IaaS) continues to be a cornerstone of efficient operations. Our latest research reveals an uptick in IaaS adoption. This surge is driven by the increasing demand for scalable, flexible, and cost-effective IT solutions. Our data suggests that the adoption rate is high when compared to other technologies in our annual study. However, the investment rate is moderate. This suggests that many organizations have established mature IaaS deployments and are now focusing on optimization and cost-efficiency rather than significant new investments

Figure 2 from our full report, IaaS Adoption Trends and Customer Experience , shows that adoption rates for IaaS have shown a generally increasing trend, while investment rates have fluctuated. In the past five years, adoption has risen from 56% of all organizations in 2020 to 72% in 2024. During the same period, the percentage of organizations making new investments in IaaS has fluctuated, with year-to-year differences of up to nine percentage points, finally standing at 55% in 2024.

IaaS refers to the use of service providers for computing resources such as storage and processing without concern about the technical infrastructure. Our definition of IaaS only counts the use of public cloud IaaS providers, not the use of cloud infrastructure in an organization’s own internal data centers. Likewise, we do not count the deployment of hosted or SaaS applications within this category.

“IaaS, while mature, is constantly evolving,” said Asif Cassim, principal analyst for Avasant Research, based in Los Angeles. “Trends like AI, serverless, and edge computing are driving innovation, efficiency, and cost-effectiveness, opening new avenues for organizations to thrive.”

The integration of AI with IaaS, through AI as a Service, empowers enterprises with AI capabilities without significant upfront investment or in-house expertise. IaaS also serves as a flexible foundation for serverless computing, allowing developers to focus on application development while the infrastructure scales dynamically. This pay-as-you-go model and built-in security features make it cost-effective and secure. Furthermore, the convergence of edge computing and IaaS enables real-time data processing and analysis, crucial for applications like IoT and autonomous vehicles, by moving computation closer to the data source. This synergy unlocks new possibilities for businesses to optimize operations, improve user experience, and gain a competitive edge.

However, organizations using IaaS face many obstacles. Security concerns are crucial, as transferring sensitive data to cloud environments increases the risk of data breaches and illegal access. Another major concern is vendor lock-in, which makes migrating to other platforms difficult and costly. Skill gaps are also a significant barrier, as firms may lack the skills required to properly manage and safeguard IaaS installations. Furthermore, cost management can be complex, and firms may unintentionally overspend if they are not vigilant.

Based on our survey, this report quantifies the current adoption and investment trends for IaaS and the benefits driving adoption. We assess adoption and investment trends by organization size and sector. We also look at the economics of IaaS by assessing the ROI and TCO experience of organizations that have adopted IaaS and conclude with practical advice for those seeking to gain support for IaaS investments.

This Research Byte is based on our report on this subject, IaaS Adoption Trends and Customer Experience 2024. The full report is available at no charge for subscribers, or it may be purchased by non-clients directly from our website (click for pricing).