A report from market research firm Omdia finds that global spending on cloud infrastructure continues to accelerate, with spending in the fourth quarter of 2025 reaching $110.9 billion—a 29 percent increase year over year.
Cloud providers see strong growth momentum
The three leading cloud providers all reported strong performance during the quarter. Amazon Web Services (AWS) retained its market leadership with a 32 percent share and 24 percent year-over-year growth. Microsoft Azure followed with a 22 percent share, expanding by 39 percent, while Google Cloud posted the fastest growth at 50 percent, increasing its market share to 12 percent.
Forecasts suggest cloud infrastructure spending will continue to climb, rising by roughly 27 percent in 2026. Much of this growth is being fueled by investments in artificial intelligence (AI) applications. Hyperscalers are committing significant capital to expand data center capacity and support AI workloads. AWS expects capital expenditures to reach $200 billion in 2026, more than 50 percent higher than the nearly $132 billion recorded in 2025. Microsoft reported quarterly capital expenditures of $37.5 billion, up nearly $15 billion year over year. Google, meanwhile, increased its 2026 capital expenditure guidance to between $175 billion and $185 billion, more than double the prior year’s level.
What rising cloud spend means for MSPs
This surge in cloud infrastructure investment naturally creates opportunities for managed service providers (MSPs). While a large portion of that revenue will flow directly to cloud service providers, many organizations will continue to rely on MSPs to help manage, optimize, and secure the applications running on that infrastructure.
Supply constraints threaten to complicate growth
The biggest challenge, however, is that demand may soon outpace available resources—particularly when it comes to AI infrastructure. IT organizations are already booking graphics processing unit (GPU) resources months in advance. A new wave of AI accelerators is expected to help alleviate these pressures by providing alternative processor options for building and deploying AI-driven applications.
More challenging still, processor and memory manufacturers are diverting capacity to meet AI infrastructure demand. This shift is contributing to shortages of components needed to support legacy applications deployed in the cloud or in local data centers. The result is a series of supply chain constraints that collectively drive up the total cost of IT. Unfortunately, rising costs often reduce the number of applications organizations are willing—or able—to deploy.
It is still too early to determine how these supply-and-demand dynamics will ultimately affect MSPs, but one thing is clear: the equation is becoming more complex. MSPs should expect continued demand for services, paired with increased pressure to control costs as infrastructure expenses rise. The ongoing challenge will be ensuring that end users fully recognize the value of managed services—not just the software and hardware that make those services necessary in the first place.
Photo: Igor Nikushin / Shutterstock
This post originally appeared on Smarter MSP.