Sponsored By

Is AWS on Verge of Losing Its ‘King of Cloud’ Title?

With the latest quarterly earnings in the books, we’ve got some interesting observations to consider.

Kelly Teal

August 8, 2023

3 Min Read
King of cloud
Nata-Lia/Shutterstock

Is Amazon Web Services about to lose its title as king of cloud computing?

With hyperscalers’ second-quarter earnings now in the books, it’s clear that Microsoft Azure, Google Cloud and, yes, even Oracle Cloud, are growing at a much faster clip than the longtime leader. AWS has not relinquished its standing as the king of cloud computing since its founding in 2006.

That could be about to change.

Consider this: Even as AWS showed a 12% second-quarter revenue increase, Azure beat it with 26% (in Microsoft’s fiscal fourth-quarter that ended June 30). Google Cloud, however, demonstrated more impressive numbers, at 28%. And Oracle Cloud, even though it’s still the smallest of the hyperscalers, grew 54% in the most recent quarter.

For now, at least, AWS continues to rank as the king of cloud computing. Synergy Research Group says the company still holds 32-34% of global market share for IaaS, PaaS and hosted private cloud services. But, that footing has fallen “toward the bottom end of that range,” analysts wrote on Aug. 3. Investors and industry experts are keen to see what happens to AWS in the current quarter, for which Amazon CEO Andy Jassy has provided no guidance.

All that insight comes as Microsoft Azure, Google Cloud and Oracle Cloud are quickly encroaching on the king of cloud computing’s traditional territory. And it looks like Azure, largely because of the popularity of its generative AI tools, could soon track enough growth to outpace AWS. (While Google Cloud and Oracle Cloud are displaying the bigger double-digits, Azure still has more adoption than the other two — at the moment, anyway.)

In fact, both Google and Microsoft boosted their worldwide market share by a percentage point each in the latest quarter, Synergy found. Analysts pegged Azure at 22% and Google Cloud at 11%. Overall, AWS, Azure and Google Cloud control 72% of the worldwide market, the research firm added.

Can AWS Hold On to Its Place as King of Cloud?

When assessing the entire cloud landscape from an enterprise perspective, Synergy says organizations laid out close to $65 billion on cloud infrastructure services in the three months between April and June. That marked a $10 billion jump over the second quarter of 2022. Public cloud infrastructure and platform services made up most of the demand, rising a total of 19%, Synergy said.

Despite the positive numbers, analysts said, without pointing to specific providers, the cloud spending growth rate is declining. The trend, they added, is “driven by macroeconomic pressures, some belt-tightening by enterprises, local market issues in China and, above all else, the law of large numbers.”

At odds with that statement, though, is the reality of quarterly market growth in public cloud computing, which Synergy acknowledged. In “absolute terms,” the sector keeps showing $10 billion growth, analysts said. The trend likely will continue, they added.

“With the Chinese market potentially returning to somewhat more normal circumstances, many economic pressures easing, and enterprises having rationalized historic cloud usage and spending, Synergy expects future cloud growth rates to remain buoyant.”

Indeed, when it comes to world regions, Synergy sees the strongest public cloud computing adoption in Asia Pacific (it did not name providers making the most inroads). Specifically, India, China, Australia and South Korea all are exhibiting more than 20% year-over-year growth, the firm found.

“The current economic climate has crimped some growth in cloud spending, but the market continues to expand at a healthy rate despite those short-term challenges,” analysts wrote.

Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn.

 

Read more about:

Channel Research

About the Author(s)

Kelly Teal

Contributing Editor, Channel Futures

Kelly Teal has more than 20 years’ experience as a journalist, editor and analyst, with longtime expertise in the indirect channel. She worked on the Channel Partners magazine staff for 11 years. Kelly now is principal of Kreativ Energy LLC.

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like