Q3 enterprise spending on cloud infrastructure services has crossed $57 billion with year-on-year growth of 24%, according to Synergy Research Group. This increase in cloud spending is well over $11 billion from Q3 2021 despite facing two fierce headwinds – the US dollar being stronger than ever and a severely restricted Chinese market.
Google gained market share in the third quarter of this year compared to Q2 2022, while Amazon and Microsoft’s market shares remained about the same. Compared to a year ago, all three companies have gained at least one percentage point of market share. Amazon, Microsoft, and Google have a combined 66% share of the worldwide market. This is up from 61% a year ago. All other cloud providers combined have tripled their revenues since late 2017. However, their collective market share has plunged from 50% to 34%. This is because their growth rates remain far below the market leaders.
Amazon net sales increased by 15% to $127.1 billion in Q3 2022 as compared to $110.8 billion in Q3 2021. AWS segment sales increased by 27% year-over-year to reach $20.5 billion in the third quarter of this year. AWS has announced new commitments for customers in many industries and countries. It is continuing to expand its infrastructure around the world. In this quarter, AWS opened its second region in the UAE and plans to launch new regions in Thailand.
Azure came second with a 21% market share. Microsoft has been making efforts to move more of its services to Azure. In Q3 2022, the company announced that it has opened a new data center region in Qatar. This is a major accomplishment for Microsoft as it is the first hyperscaler to offer enterprise-grade services in the country.
In Q3 2022, Google Cloud brought in a revenue of $6.89 billion as compared to $4.9 in Q3 2021. This quarter, the company’s consumer sector remained strong, while it also gained opportunities from the public sector and governments. Announcements included new Google Cloud regions in Asia Pacific, located in Malaysia, Thailand and New Zealand.
Three of the leading cloud providers all report their financials in US dollars. This has made their growth rates weaker because of the strong dollar. But despite this, they have all been increasing their share of a rapidly growing market. This shows that they have good strategies and are doing well. However, as per Synergy Research, all other cloud providers combined have been losing around three percentage points of market share each year, although they are still seeing strong double-digit revenue growth.
Public IaaS and PaaS services account for most of the cloud market. These services grew by 26% in Q3. The major providers of these services are very dominant in the public cloud market, where the top three companies control 72% of it.
The global cloud spending in Q2 2022 had increased 33% year on year (YoY) to US$62.3 billion according to a research report by Canalys. The top three vendors in Q2 2022 were Amazon Web Services (AWS), Microsoft Azure, and Google Cloud, which together accounted for 63% of global spending in Q2 2022 and grew 42% collectively.
AWS was the leading cloud service provider accounting for 31% of total cloud infrastructure services spending in Q2 2022. Azure was the second largest cloud service provider with a 24% market share. Google Cloud accounted for 8% of the cloud market share in Q2 2022.
Hyperscalers are building new infrastructure to reach new customers all over the world. They are also looking for new products and technology advances that will help them grow their businesses. The increased use of cloud services has led to thoughts about the value that can be extracted from data in the cloud. Both Google and Microsoft have talked about how they are developing products around data and AI. It is expected that the future cloud service market will be able to create value by using data and AI.
IDC forecasts that cloud infrastructure spending in 2022 will increase by 22% compared to 2021 and reach $90.2 billion and non-cloud infrastructure spending will grow by 1.8% to $60.7 billion.
Image source: Synergy Research Group
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