AI is now central to public cloud strategy, but it’s boosting private cloud too as users seek sovereignty and security for sensitive workloads. Despite VMware price increases affecting data centers, on-premises solutions will see significant growth, with customers balancing innovative public cloud AI managed services, generative AI’s (genAI’s) autonomy and security, and sustainability goals. Public cloud providers will respond with enhanced localization and sovereign cloud offerings alongside advanced genAI services. Security platform vendors will challenge hyperscaler offerings in multicloud and hybrid environments. This report explores Forrester’s predictions for cloud computing in 2025.