South Africa’s cloud services market is expected to more than double over the next four years, surpassing R100-billion by 2029 as enterprises continue shifting workloads off legacy infrastructure despite mounting pressure to rein in costs.

According to the BMIT Cloud Report 2025, the local cloud market is projected to grow from an estimated R49.6-billion in 2025 to R101.5-billion in 2029. While growth is expected to slow slightly from the breakneck pace of recent years, BMIT said demand remains exceptionally strong.

The research suggests the market is entering a new phase, moving beyond basic infrastructure migration towards more selective cloud adoption focused on cost control, modernisation and competitiveness.

Many organisations, having completed early “lift-and-shift” migrations, are now grappling with higher-than-expected operating costs and are reassessing how cloud resources are consumed.

As a result, enterprises are increasingly prioritising cloud cost management, often referred to as FinOps, to ensure they pay only for the resources they use. Poor visibility and governance over cloud spending have led to widespread “cloud waste”, particularly among companies relying on hyperscale providers and exposed to currency volatility as cloud services are typically priced in US dollars.

Despite these challenges, several structural factors continue to underpin strong growth. Security concerns, including rising ransomware threats, are pushing cloud resilience and “defence-in-depth” strategies into boardroom discussions.

Drivers

At the same time, South Africa’s unreliable power supply is accelerating cloud adoption as companies look to avoid the cost and complexity of maintaining on-premises infrastructure with sufficient backup power.

Artificial intelligence is emerging as another key growth driver. Enterprises are increasingly moving data to the cloud to take advantage of AI services offered by hyperscale providers, as running large language models on local infrastructure remains prohibitively expensive due to the cost of GPUs.

Read: Absa turns to AWS in expanded cloud banking push

BMIT said “platform as a service” is the fastest-growing segment of the market, with a projected compound annual growth rate of 26%, reflecting a shift towards cloud-native development and microservices.

However, a shortage of certified cloud skills is constraining adoption and increasing reliance on managed service providers – a dynamic that is both a bottleneck and a commercial opportunity.

The report concludes that while cost pressures are reshaping how organisations consume cloud services, they are unlikely to slow the overall expansion of the market, which is becoming a central pillar of South Africa’s digital economy. – © 2026 NewsCentral Media

Get breaking news from TechCentral on WhatsApp. Sign up here.