Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Cloud Sustainability Market size was valued at USD 23.6 billion in 2024 and is projected to reach USD 252.3 billion by the end of 2037, rising at a CAGR of 20% during the forecast period, i.e., 2025-2037. In 2025, the cloud sustainability is evaluated at USD 28.3 billion.
The rising regulatory mandates and ESG compliance pressures have been a key driver for market growth. The global and regional environmental regulations are increasingly shaping IT procurement decisions. Governments across Europe, North America, and Asia-Pacific are enforcing stricter carbon reporting requirements, particularly for data-intensive industries. Enterprises are under growing pressure to align with Environmental, Social, and Governance (ESG) mandates, and cloud providers are being evaluated on their ability to deliver low-carbon digital services.
The regulatory standards compel organizations to migrate to green cloud platforms with carbon tracking and offsetting capabilities. Thus, in response to the EU’s Corporate Sustainability Reporting Directive (CSRD), Microsoft launched a suite of cloud-based carbon tracking and reporting tools for European customers. These tools help enterprises automate carbon data collection and comply with new ESG disclosure requirements, particularly within the Microsoft Cloud for Sustainability platform. This coordinates with the regulatory guideline forcing organizations to adopt compliant cloud solutions that offer transparent carbon accounting and traceability.
Cloud Sustainability Sector: Growth Drivers and Challenges
Growth Drivers
- Energy efficiency and cost optimization initiatives: Operational cost savings remain a powerful incentive for cloud sustainability. Traditional on-premise systems are increasingly being phased out in favor of cloud-native architectures that offer scalable compute capacity with significantly lower energy requirements. Modern cloud providers invest in hyperscale data centers that run on renewable energy and utilize advanced cooling technologies. For instance, Amazon Web Services (AWS) reported that its better Graviton3 processors offer up to 60% better energy efficiency for certain workloads compared to x86-based instances.
- Innovation in green cloud technologies: Innovations such as AI-powered resource allocation, serverless computing, and carbon-aware workload scheduling encourage the growth of sustainable cloud platforms. Cloud providers are integrating real-time telemetry and carbon intelligence dashboards into their offerings, giving businesses granular control over their carbon footprint. For instance, in 2024, Google Cloud introduced carbon-aware computing features that schedule workloads based on the availability of low-carbon energy in specific regions. Through this, batch jobs and AI model training can be delayed or relocated to data centers with a greener energy mix. This innovation is part of Google’s broader aim to operate on 24/7 carbon-free energy by 2030. Additionally, the adoption of sustainable software engineering practices and containerization is reducing redundant energy consumption in cloud operations.
- Investor preference for sustainable digital infrastructure: As institutional investors and venture capitalists apply ESG filters to their portfolios, companies with demonstrable cloud sustainability strategies are gaining favor. Cloud providers are increasingly publishing sustainability reports to attract green capital. Furthermore, B2B procurement teams are incorporating sustainability metrics into vendor selection criteria, accelerating the demand for environmentally responsible cloud solutions across verticals such as finance, healthcare, retail, and manufacturing.
Challenges
- Lack of standardized metrics for carbon accounting: Despite growing demand for sustainability, the cloud industry lacks a unified framework for measuring and reporting carbon emissions. Providers use different methodologies to calculate emissions, making it difficult for enterprise customers and investors to make comparisons. This inconsistency undermines transparency and creates confusion in procurement and ESG reporting.
- High capital costs for green data center infrastructure: Building a truly sustainable cloud infrastructure, such as hyperscale data centers powered entirely by renewable energy and equipped with cutting-edge cooling systems, requires significant capital investment. For smaller cloud providers and emerging markets, these upfront costs can be prohibitive, slowing the adoption of energy-efficient technologies and widening the sustainability gap between tech giants and regional players.
Cloud Sustainability Market: Key Insights
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Base Year |
2024 |
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Forecast Year |
2025-2037 |
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CAGR |
20% |
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Base Year Market Size (2024) |
USD 23.6 billion |
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Forecast Year Market Size (2037) |
USD 252.3 billion |
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Regional Scope |
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Cloud Sustainability Segmentation
Component (Solutions, Service)
The solutions segment is expected to hold a 70% share by 2037 due to the increasing demand for energy-efficient cloud technologies and sustainable computing practices. Key solutions, such as green cloud services, energy-efficient data centers, and AI-powered energy management are enabling businesses to reduce their carbon footprints. Moreover, the integration of renewable energy sources in cloud operations is driving this growth. These advancements are aligning with global sustainability goals and regulations, further boosting market demand.
End use (IT and Telecom, BFSI, Healthcare, Retail & E-Commerce, Manufacturing)
The IT and telecom segment is predicted to hold a share of around 38% through 2037 due to the sector’s shift towards energy-efficient infrastructure and sustainable digital services. Telecom companies increasingly adopt cloud solutions to manage network traffic, enhance data storage efficiency, and reduce operational energy consumption. Additionally, the rise of 5G and IoT drives the need for more sustainable cloud solutions to support massive data processing. These trends, combined with regulatory pressures for carbon reduction, are fueling the growth of cloud sustainability in IT and telecom.
A recent example highlighting the growth of the IT and telecom segment in the cloud sustainability market is the collaboration between Nokia and Bharti Airtel on the Green 5G initiative. Announced in October 2024, this project aims to enhance energy efficiency across Airtel’s 4G and 5G Radio Access Network (RAN) by leveraging technologies such as artificial intelligence and machine learning. This initiative focuses on zero traffic, zero-watt operation, reducing power consumption during periods of no traffic, and is projected to reduce Airtel’s carbon emissions by approximately 143,413 metric tons of CO2 annually. This partnership reflects Nokia’s role in promoting sustainable practices within the telecommunications industry.
Our in-depth analysis of the global market includes the following segments:
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End use |
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Customize this ReportCloud Sustainability Industry: Regional Scope
North America Market Analysis
North America is anticipated to garner a dominant share of 40% from 2025 to 2037 due to strict environmental regulations and rising carbon disclosure requirements. Enterprises are prioritizing green cloud solutions to align with investor-driven ESG benchmarks. Additionally, tech giants are investing heavily in renewable-powered data centers and AI-powered energy optimization, and consumer demand for eco-friendly digital services is accelerating the shift toward sustainable cloud adoption.
The U.S. cloud sustainability market is growing rapidly as federal mandates push agencies towards net-zero emissions. Tech giants powering data centers with renewable energy and pioneering carbon-aware computing also fuel market growth. For instance, in May 2024, Microsoft invested USD 10 billion to develop 10.5 gigawatts of renewable energy. This move exemplifies the industry’s push towards sustainability. Additionally, energy-efficient innovations, such as AI-optimized cooling, are accelerating green cloud adoption. Thus, these strategic investments by leading tech companies are pivotal growth drivers, propelling the U.S. market towards a greener future.
Canada cloud sustainability market is rapidly expanding due to strategic government incentives and the country’s abundant renewable energy resources. A recent example of Canada’s commitment to cloud sustainability is the federal government’s proposal to encourage domestic investments in AI data centers. In December 2024, the federal government proposed a USD 15 billion incentive to encourage domestic pension funds to invest in AI data centers powered by green energy. This initiative aims to address the rising energy demands of AI technologies such as ChatGPT while promoting sustainable energy solutions. By incentivizing investments in green-powered data centers, Canada is taking proactive steps to ensure that the growth of AI and cloud computing aligns with its environmental goals.
Asia Pacific Market Analysis:
Asia Pacific is witnessing a surge in cloud sustainability efforts and is expected to capture a significant market share through 2037. The growth of the market is propelled by the adoption of remote and hybrid work models. Organizations are integrating energy efficient cloud solutions with Enterprise Resource Planning (ERP) systems to enhance sustainability reporting and management. This integration allows for better monitoring of environmental impacts, aligning with the region’s commitment to sustainable development.
The cloud sustainability market in China is expanding due to the government’s emphasis on green development and the booming IT industry. The country’s software and information technology services sector generated approximately USD 1.73 trillion in business revenues in 2023, marking a 13.4% year-on-year increase. This growth highlights the rising demand for energy-efficient cloud infrastructure to support China’s environmental goals.
South Korea’s cloud sustainability market is growing due to support from government initiatives such as the K-Cloud Project, which allocated approximately USD 76.5 million in June 2023 to establish a robust domestic cloud infrastructure. The project includes significant investments to enable data centers to adopt domestically produced AI semiconductors by 2030. Additionally, the government’s Cloud First Policy mandates public sector organizations to prioritize cloud services, further driving the adoption of sustainable cloud solutions. Further, investments by key players such as Amazon Web Services (AWS)are also driving growth. For instance, in 2023, AWS committed to investing USD 5.88 billion in South Korea's cloud computing infrastructure by 2027. This investment aims to solidify South Korea's position as a global leader in internet-based cloud applications and is a response to growing competition in the South Korean cloud market.
Companies Dominating the Cloud Sustainability Landscape
- Amazon Web Services, Inc.
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
- Microsoft Corporation
- Google LLC
- IBM Corporation
- Oracle Corporation
- SAP SE
- Salesforce, Inc.
- Dell Technologies Inc.
- Equinix, Inc.
The top companies dominating the cloud sustainability market include Amazon Web Services, Microsoft, and Google, each investing heavily in carbon-neutral data centers and renewable-powered cloud infrastructure. These tech giants are setting industry benchmarks through green cloud innovations, sustainable AI, and energy-efficient computing solutions. Here are some leading players in the cloud sustainability market:
In the News
- In September 2024, Oracle launched a new tool called Oracle Fusion Cloud Sustainability. It’s part of the Oracle Fusion Cloud Applications Suite and helps businesses track and report their sustainability efforts more easily. It’s free for customers and gives companies a way to collect and analyze important sustainability data. This helps with better reporting, smarter decision-making, and faster progress towards environmental goals
- In April 2024, Microsoft Corp. and The Coca‑Cola Company announced a five-year partnership to upgrade Coca‑Cola’s technology systems. The goal is to use advanced technology to boost global innovation and productivity. As part of this deal, Coca‑Cola is investing a USD 1.1 billion IN Microsoft Cloud and its AI tools. The companies will also test new technologies such as Azure OpenAI and Microsoft 365 Copilot to explore how AI can make business tasks more efficient and improve workplace productivity.
Author Credits: Abhishek Verma
- Report ID: 7627
- Published Date: May 09, 2025
- Report Format: PDF, PPT
