Everything as a Service Market

Since 12 September 2025, every cloud provider selling to European Union (EU) customers has had to let them leave: the Data Act, Regulation (EU) 2023/2854, now applies, and from 12 January 2027 its Article 29 bans switching charges outright. Everything as a service (XaaS) covers technology bought as a subscription or by consumption instead of as an owned asset: software as a service (SaaS), infrastructure as a service (IaaS), platform as a service (PaaS), security as a service, device and desktop as a service, and pay-per-use hardware such as HPE GreenLake, Dell APEX and Lenovo TruScale. Douglas Insights sizes the everything as a service market at USD 915.35 billion in 2025, from 1,186.0 million paid business seat-equivalents at USD 771.8 per seat-year, and at USD 3.12 trillion in 2035, a revenue CAGR (compound annual growth rate) of 13.06%. The study sits in our enterprise software coverage and follows the Douglas Insights research methodology.

Which companies supply everything as a service, and how concentrated is the XaaS market?

Three hyperscalers lead everything as a service, and Douglas Insights puts Microsoft, Amazon Web Services (AWS) and Google Cloud at 39.96% of 2025 revenue. Their positions rest on owned data centres, first-party artificial intelligence (AI) models and huge seat bases.

Microsoft leads. Azure revenue passed USD 100 billion for the first time in the fiscal year to 30 June 2026, Intelligent Cloud reached USD 137.8 billion and Azure grew 43% in the June quarter, according to its 29 July 2026 results filing. Douglas Insights estimates Microsoft’s calendar 2025 XaaS revenue at USD 178.4 billion, or 19.49%.

AWS booked USD 128.7 billion of 2025 sales, up 20%, and USD 35.6 billion in the fourth quarter, up 24%, according to Amazon’s fourth-quarter release. Google Cloud reported USD 17.66 billion of fourth-quarter revenue, up 48%, and an exit run rate above USD 70 billion in the Alphabet 2025 results; Douglas Insights estimates its full year at USD 58.7 billion. The Data Act switching rules in force since 12 September 2025 are the main threat to that 39.96% top-three hold in Europe, because lower exit costs make second sources cheap.

Salesforce reported fiscal 2026 revenue of USD 41.53 billion, up 10%, with remaining performance obligations (RPO) of USD 72.4 billion and Agentforce annual recurring revenue (ARR) of USD 800 million, in its 25 February 2026 filing. SAP grew cloud revenue 23% to EUR 21.02 billion in 2025 with a current cloud backlog of EUR 21.05 billion, per its 29 January 2026 statement. ServiceNow lifted 2025 subscription revenue 21% to USD 12.88 billion and counted 603 customers above USD 5 million of annual contract value (ACV), according to its 28 January 2026 release.

Which everything as a service segment leads, SaaS or IaaS?

SaaS leads everything as a service with 44.8% of 2025 revenue, worth USD 410.08 billion, because almost every buyer starts with e-mail, office and finance software. IaaS follows at 24.6%, and hardware infrastructure as a service grows fastest at 16.97% a year.

SaaS earns USD 410.08 billion and reaches USD 1.15 trillion by 2035 at 10.85% a year. Eurostat found SaaS in use at 96.44% of EU enterprises that buy cloud, the most mature slice; our Subscription Billing Management Market report covers the software that invoices those seats.

IaaS holds USD 225.18 billion and grows 15.40% a year to USD 943.15 billion. Graphics processing unit (GPU) clusters for AI are rented by the hour; Oracle’s cloud infrastructure revenue rose 77% to USD 18.1 billion in fiscal 2026.

PaaS takes 15.3%, or USD 140.05 billion, growing 14.35% a year. Managed databases, runtimes and AI model endpoints sit here; Eurostat counts development platforms at only 26.08% of cloud-buying firms.

Security as a service holds 6.2%, worth USD 56.75 billion, rising 13.20% a year to USD 196.09 billion. Eurostat puts paid cloud security software at 65.49% of cloud users; our Cyber Security Market study sizes the wider spend including on-premises tools.

Device and desktop as a service is worth USD 44.85 billion, 4.9%, and grows slowest at 10.05% a year, because leased laptops compete with cheap outright purchase. Cloud PCs are covered in depth in our Desktop as a Service Market report.

Hardware infrastructure as a service is the smallest slice at 4.2%, or USD 38.44 billion, yet the fastest at 16.97% a year, reaching USD 184.35 billion. Customers keep servers and storage in their own sites but pay per use through HPE GreenLake, Dell APEX or Lenovo TruScale.

Why are enterprises moving more spend into everything as a service?

Everything as a service seat-equivalents grow 4.62% a year to 2035 in the base case, and AI consumption supplies 1.64 points of it. Small firms catching up, the hardware shift, device refreshes and cheaper switching add the remaining 2.98 points.

AI training and inference consumption: 1.64 points

AI workloads add 1.64 points. Azure grew 43% in the quarter to 30 June 2026, Google Cloud 48% in the fourth quarter of 2025 and Oracle cloud infrastructure 93% in its quarter to May 2026, per the Oracle 10 June 2026 release. Oracle also reported RPO of USD 638 billion, up USD 85 billion in one quarter, a contracted queue that converts into IaaS seat-equivalents over the forecast period.

Small and medium-sized enterprises (SMEs) catching up: 1.38 points

SME adoption adds 1.38 points. Eurostat found 49.3% of small EU firms buying paid cloud in 2025, up 7.48 percentage points from 2023, against 84.67% of large firms, in its cloud computing statistics. Closing half that 35.37-point gap by 2035 adds about 140 million seat-equivalents worldwide on the Douglas Insights model.

Pay-per-use hardware: 0.57 points

Hardware as a service adds 0.57 points. HPE reported ARR of USD 3.2 billion for the quarter to 31 October 2025, up 63%, in its fiscal 2025 fourth-quarter filing. Lenovo’s Solutions and Services Group passed USD 10 billion of revenue for the first time in fiscal 2025/26, up 19%, and named TruScale a key growth driver, per its 22 May 2026 results. Dell’s fiscal 2026 annual report lists utility, subscription and as-a-service payment options and USD 11.9 billion of Dell Financial Services originations.

Device refresh and security bundles: 0.61 points

Device and security services add 0.61 points. Windows 10 support ended on 14 October 2025, as Microsoft’s support notice records, pushing fleets into new hardware that leasing firms bundle with management, endpoint protection and Windows 365 Cloud PCs at a monthly fee.

Cheaper switching under the Data Act: 0.42 points

The Data Act adds 0.42 points. Since 12 September 2025, providers must support switching and data export, and Article 29 of Regulation (EU) 2023/2854 caps switching charges at cost until 12 January 2027, then removes them. Lock-in-wary firms now sign, and multi-cloud buyers add second contracts. The five contributions, 1.64 + 1.38 + 0.57 + 0.61 + 0.42, sum to the 4.62% volume leg.

What holds back everything as a service growth to 2035?

Three restraints remove 0.79 points from everything as a service volume growth, which would otherwise run at 5.41% a year. Seat compression from AI agents, workload repatriation and data sovereignty rules each subtract a measured slice.

Seat compression takes 0.26 points. Our model assumes AI agents replace part of the contact centre, help desk and back-office headcount that SaaS vendors bill per seat, so seat counts in CRM and IT service management grow slower than revenue. Salesforce’s USD 800 million Agentforce ARR shows vendors moving toward consumption pricing to offset that loss.

Repatriation and power limits take 0.31 points. Douglas Insights assumes steady, predictable workloads move back to owned or colocated hardware once cloud bills pass a threshold, and that grid connection queues delay new hyperscale regions. Hardware as a service recaptures part of that flow.

Sovereignty and sector rules take 0.22 points. Financial firms under the Digital Operational Resilience Act (DORA), Regulation (EU) 2022/2554, applicable since 17 January 2025, must document exit plans and concentration risk for critical ICT (information and communication technology) providers, which slows single-vendor migrations.

Where is everything as a service bought, and why does Asia Pacific grow fastest?

North America buys USD 432.96 billion of everything as a service in 2025, 47.3% of the world, while Asia Pacific grows fastest at 16.10% a year. US headquarters of the largest vendors and US enterprise seat prices keep North America in front through 2035.

North America reaches USD 1.31 trillion by 2035 at 11.70% a year. The largest vendors are US-based and US list prices set the global ceiling.

Europe holds USD 216.02 billion in 2025 and grows 12.20% a year to USD 683.01 billion. Eurostat counts 52.74% of EU enterprises buying paid cloud, led by Finland at 79.21%, Italy at 75.6% and Malta at 74.87%, while Bulgaria trails at 17.83% and Romania at 24.94%.

Asia Pacific is worth USD 190.39 billion and rises 16.10% a year to USD 847.18 billion, the fastest of the five regions, as Indian, Southeast Asian and Japanese enterprises move from on-premises ERP to cloud subscriptions and AI training clusters open in the region.

The Middle East and Africa form the wildcard at USD 33.87 billion, growing 14.44% a year to USD 130.50 billion, as Douglas Insights expects Saudi and Emirati government and energy buyers to move national workloads into in-country cloud regions. Latin America holds USD 42.11 billion, rising 13.90% a year to USD 154.73 billion, led by Brazil and Mexico.

How much does an everything as a service seat cost in 2025?

An everything as a service seat-equivalent averages USD 771.8 a year in 2025, inside a band from USD 72 for a basic productivity seat to several thousand dollars for CRM and GPU-heavy infrastructure. Feature tier, AI add-ons and consumption set the price.

List prices are moving up. Microsoft announced on 4 December 2025 that from 1 July 2026 Microsoft 365 E3 rises from USD 36.00 to USD 39.00 per user per month, E5 from USD 57.00 to USD 60.00 and Business Basic from USD 6.00 to USD 7.00, according to its licensing update. Douglas Insights projects the average seat-equivalent price to rise 8.07% a year, to USD 1,677.1 by 2035, as AI add-ons and consumption-billed infrastructure lift the mix.

How do large enterprises and SMEs split everything as a service spend?

Large enterprises, with 250 or more employees, spend USD 564.77 billion on everything as a service in 2025, 61.7% of the total, against USD 350.58 billion, or 38.3%, from SMEs. Large firms buy more services per seat, not only more seats.

Eurostat found 84.67% of large EU firms, 66.78% of medium firms and 49.3% of small firms buying paid cloud in 2025. Large firms add ERP, used by 30.12% of cloud buyers, and CRM at 27.91%; SMEs concentrate on e-mail at 85.15% and office software at 71.69%, keeping their seat price below the USD 771.8 mean.

SMEs grow faster in seat count from a lower base: Douglas Insights puts 1.38 points of the 4.62% volume leg on SME catch-up.

Which deployment models carry everything as a service: public, hybrid or private?

Public cloud carries USD 657.22 billion of everything as a service in 2025, 71.8% of revenue, while hybrid deployments take USD 179.41 billion, or 19.6%, and private consumption models USD 78.72 billion, or 8.6%. Data residency decides the split.

Public multi-tenant cloud is the default for SaaS and most IaaS. Hybrid deployments, one control plane across own racks and a hyperscaler, fit banks and manufacturers. Private consumption models, such as HPE GreenLake in a customer data centre, bill like cloud but keep hardware on site, and they grow with the 16.97% hardware infrastructure as a service segment.

Eurostat counts IaaS at 77.25% of cloud-buying EU firms and database hosting at 45.52%, so most cloud buyers already mix deployment models.

Which rules on cloud switching and operational resilience reach everything as a service providers?

Two European laws shape everything as a service contracts: the Data Act, applicable since 12 September 2025, and DORA, applicable since 17 January 2025. Both make exit planning and portability contractual duties, not options.

Chapter VI of Regulation (EU) 2023/2854 requires data processing service providers to remove obstacles to switching, set a maximum two-month notice period and support export of data and digital assets. Article 29 allows only reduced, cost-based switching charges until 12 January 2027 and none afterward. Douglas Insights counts 0.42 points of volume growth from this rule.

Regulation (EU) 2022/2554 obliges banks, insurers and investment firms to register ICT third-party contracts and test exit strategies, and it brings critical ICT providers under direct oversight by European supervisors. Suppliers to finance now carry audit and reporting cost.

What if AI consumption outruns plan: how far can the everything as a service forecast for 2035 move?

Everything as a service ends 2035 between USD 2.31 trillion and USD 4.06 trillion across our three cases, around a base of USD 3.12 trillion. AI consumption sets the spread, because it carries 1.64 points of the base volume leg and most of the price leg.

In the slower case, AI agents cut billed seats and power limits delay data centres, so volume grows 3.10%. In the faster case, the Data Act switching rules in force since 12 September 2025, set out in Regulation (EU) 2023/2854, pull lock-in-wary firms into the cloud and Oracle’s USD 638 billion RPO converts on schedule, lifting volume to 5.90% a year. One extra point of yearly volume growth adds USD 311.84 billion to the 2035 value; one point less removes USD 286.13 billion.

Published forecasts for everything as a service span roughly 18.9% to 28.0% a year. Our 13.06% sits below that range for two reasons: those forecasts cover shorter windows that start from 2021 to 2024 bases and include managed IT services, while we count recognised subscription revenue only over ten years and let hyperscaler growth decelerate as the base passes USD 1 trillion.

Douglas Exclusive: the XaaS disclosure ledger

The XaaS disclosure ledger is a Douglas Insights model built from 14 sourced inputs: eleven company filings and results releases, one Eurostat table, one regulation text and one vendor price list. It lines up what each supplier discloses about its as-a-service line.

Four of the five fastest lines, Oracle at 77%, HPE at 63%, Google Cloud at 48% and Azure at 43%, are infrastructure, while the application vendors SAP, ServiceNow and Salesforce grow between 10% and 23%.

The finding: everything as a service growth has moved from applications to infrastructure. IaaS, PaaS and hardware infrastructure as a service together hold 44.1% of 2025 revenue, USD 403.67 billion, but take 53.2% of 2035 revenue on our model. A buyer renewing SaaS has more pricing leverage than one booking GPU capacity.

How does the methodology turn 1,186.0 million seat-equivalents into USD 915.35 billion of everything as a service?

Our methodology multiplies 1,186.0 million paid business seat-equivalents in 2025 by an average USD 771.8 per seat-year to reach USD 915.35 billion. Seat-equivalents convert infrastructure and hardware spend into knowledge-worker subscription units.

The model covers 46 countries in five regions and uses 128 data points, 19 of them sourced and 109 modelled. Arithmetic: 1,186.0 x 771.8 = 915,354.8 million; 915,354.8 x (1.0462 x 1.0807)^10 = 3,124,554.7 million, or USD 3.12 trillion. Seat-equivalents reach 1,863.1 million in 2035 and the average price USD 1,677.1.

Two cross-checks agree. First, the eight named suppliers sum to USD 474.57 billion, 51.85% of our 2025 value, using disclosed AWS, Salesforce, SAP, ServiceNow and HPE figures and Douglas Insights estimates for Microsoft, Google and Oracle. Second, our 61.7% large-enterprise share is consistent with the Eurostat adoption gap of 84.67% for large firms against 49.3% for small firms in 2025.

Sources

1. EUR-Lex, Publications Office of the European Union Data Act, Regulation (EU) 2023/2854 (2023)
2. Eurostat Cloud computing: statistics on the use by enterprises (2026)
3. SEC EDGAR Microsoft fiscal 2026 fourth quarter results (2026)
4. Amazon Amazon fourth quarter 2025 results (2026)
5. Alphabet Alphabet fourth quarter and fiscal year 2025 results (2026)
6. Oracle Oracle Q4 and fiscal 2026 results (2026)
7. SEC EDGAR Salesforce fourth quarter fiscal 2026 results (2026)
8. SEC EDGAR SAP quarterly statement Q4 2025 (2026)
9. ServiceNow ServiceNow fourth quarter and full year 2025 results (2026)
10. SEC EDGAR HPE fiscal 2025 fourth quarter results (2025)

What counts as everything as a service, and what is excluded?

Everything as a service here means technology revenue a vendor recognises from subscriptions, consumption or pay-per-use contracts, valued at the price the enterprise pays. Consumer subscriptions, telecom connectivity, advertising and one-off consulting stay out.

SaaS counts business seats only, so consumer plans are excluded. IaaS and PaaS count compute, storage, network and managed platforms; device and desktop as a service counts bundled devices and Cloud PCs; hardware infrastructure as a service counts on-site servers and storage billed per use. The study covers large enterprises and SMEs, and public cloud, hybrid cloud and private consumption deployments across North America, Europe, Asia Pacific, Latin America and the Middle East and Africa.