According to the World Software and Services Expenditure Guide in the IDC Public Cloud, Expenditure on public cloud services in Europe will amount to 229,000 million dollars in 2025 and will reach 452,000 million dollars in 2029. This indicates an annual compound growth rate (CAGR) for this type of investment of 19% in five years (2024-2029).
The interest in adopting AI solutions and testing and displaying cases of use of generative will support investments on platforms such as Service (PAAS). As a result, IDC expects PAAS investments to experience an interannual growth rate of 32 % by 2026.
The macroeconomic and geopolitical situation in Europe presents some risks that could influence the expense of technology buyers in the second half of 2025. Among them are the war in Ukraine, which has triggered debates about the increase in defense spending in NATO countries.
Also conflicts in the Middle East, which could cause interruptions in the supply chain of European companies that import Asia products, as well as the volatility caused by the ongoing debates about US tariffs, which could affect certain vertical sectors. Among them, the car and consumer goods, as well as that related to different manufacturing industries.
Despite these obstacles, the public cloud will continue to be a powerful driver of key priorities, such as cybersecurity, which is expected to significantly drive the expense in security software in European federal and central governments.
Regulatory compliance in very regulated sectors, such as financial and sanitary, will also support cloud investments. In addition, automation and generative projects will accelerate cloud spending between software and information services companies, which are experiencing an important organizational restructuring promoted by artificial intelligence.
The companies of health care payers, insurance and life sciences are those that will experience the fastest acceleration of cloud spending in 2026. In Europe, health care payers and insurers will experience a remarkable growth in cloud investment, since these sectors try to meet the growing demand of customers in a scalable, efficient and safe way.
Cloud investments in the life sciences sector will be promoted by R&D investments in advanced therapies, EU financing initiatives and the acceleration of digital transformation for discovery and innovation of drugs.
Andrea Minonne, Research Director of IDC United Kingdomhas stressed that «Despite the possible effects on European public spending in the second half of 2025, including uncertainty derived from US tariffs, most European sectors currently maintain a business approach as usual. Although sectors such as car, consumer goods, chemical and other manufacturing sectors continue to be cautious in their expenses, the general perspectives of the industry are not worrisome and do not foresee a substantial effect on cloud investments.
In this sense, Minonne recalled that «The cloud remains crucial for manufacturing, since it allows solutions that improve the visibility of the supply chain, facilitate the agile management of the inventory and offer real -time demand forecasts to manage market fluctuations«.
