October 28, 2022
Enterprise spending on cloud infrastructure services surpassed $57 billion in the third quarter. That’s up more than $11 billion from last year’s third quarter, according to new data from Synergy Research Group.
This was despite two factors – a historically strong U.S. dollar and a severely restricted Chinese market. That incremental spending represents year-on-year growth of 24%. The growth rate would have been over 30% if exchange rates had remained constant over the last year.
Google increased its market share last quarter compared to the second quarter. Amazon and Microsoft shares remained relatively unchanged. All three have increased their market share by at least a percentage point over a year ago. Amazon, Microsoft and Google combined had a 66% share of the worldwide market in the quarter, up from 61% a year ago. All other cloud providers have tripled their revenues since late 2017; however, their collective market share has plunged from 50% to 34% as their growth rates remain below the market leaders.
Cloud Infrastructure Services Market Strong Worldwide
John Dinsdale is a chief analyst at Synergy Research Group.
Synergy Research Group’s John Dinsdale
“It is a strong testament to the benefits of cloud computing that despite two major obstacles to growth the worldwide market still expanded by 24% from last year. Had exchange rates remained stable and had the Chinese market remained on a more normal path, then the growth rate percentage would have been well into the thirties,” Dinsdale said.
He added that the three leading cloud providers all report their financials in U.S. dollars. Their growth rates are all “beaten down” by the historic strength of their home currency. Despite that, all three have increased their share of a rapidly growing market over the last year. This is a strong testament to their strategies and performance, Dinsdale said.
Beyond these three, other cloud providers in aggregate have been losing around three percentage points of market share per year; yet, they are still seeing strong double-digit revenue growth.
“The key for these companies is to focus on specific portions of the market where they can outperform the big three,” he said.
Synergy estimates that third quarter cloud infrastructure service revenues were $57.5 billion, with revenues from the past year reaching $217 billion. Public IaaS and PaaS services account for the bulk of the market — those grew by 26% in the third quarter. The dominance of the major cloud providers is even more pronounced in public cloud. The top three control 72% of that market. Geographically, the cloud market continues to grow strongly in all regions of the world.
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