Software as a service (SaaS) will remain the largest market segment, which is forecast to grow to $116 billion next year due to the scalability of subscription-based software.
The second-largest market segment is Cloud system infrastructure services, or infrastructure as a service (IaaS), which will reach $50 billion in 2020.
"At this point, Cloud adoption is mainstream. The expectations of the outcomes associated with Cloud investments therefore are also higher. Adoption of next-generation solutions are almost always 'Cloud-enhanced' solutions, meaning they build on the strengths of a Cloud platform to deliver digital business capabilities," Sid Nag, Research Vice President at Gartner, said in a statement.
IaaS is forecast to grow 24 per cent year over year (YoY), which is the highest growth rate across all market segments.
This growth is attributed to the demands of modern applications and workloads, which require infrastructure that traditional data centres cannot meet.
Various forms of Cloud computing are among the top three areas where most global CIOs will increase their investment next year, according to the market research agency.
As organisations increase their reliance on Cloud technologies, IT teams are rushing to embrace Cloud-built applications and relocate existing digital assets.
"Building, implementing and maturing Cloud strategies will continue to be a top priority for years to come," said Nag.
( With inputs from IANS )