Recent data from Synergy Research Group reveals that enterprise spending on cloud infrastructure services reached $79 billion in the second quarter of 2024, representing an increase of $14.1 billion, or 22%, compared to the same period last year. After experiencing a slight weakening in growth rates for much of 2023, this is the third consecutive quarter in which the year-over-year growth rate has exceeded 20%, with generative artificial intelligence being one of the factors driving this market acceleration. Despite some economic, monetary, and political headwinds, the fundamental strength of the market continues to drive spending on cloud services to new highs.
Competitive Positioning in the Market
Amazon maintains a strong lead in the market, although Microsoft and Google have seen higher percentage growth rates. The global market shares of these companies in the second quarter were 32%, 23%, and 12% respectively. Since mid-2023, the growth rates of the three companies have increased substantially. Among second-tier cloud providers, those with the highest year-over-year growth rates include Oracle, Huawei, Snowflake, and MongoDB. Oracle surpassed IBM this quarter and is now tied with Salesforce as the fifth-largest cloud provider.
Market Breakdown of Cloud Infrastructure Services
With most major cloud providers having already reported their financial data for the second quarter, Synergy estimates that quarterly revenues from cloud infrastructure services (including IaaS, PaaS, and hosted private cloud services) were $79.1 billion, with trailing twelve-month revenues reaching $297 billion. Public IaaS and PaaS services represent the majority of the market, and these grew by 23% in the second quarter. The dominance of the leading cloud providers is even more pronounced in the public cloud, where the top three account for 73% of the market.
Geographical Growth of the Cloud Market
Geographically, the cloud market continues to grow strongly in all regions of the world. When measured in local currencies, the APAC region had the strongest growth, with India, Japan, Australia, and South Korea growing by 25% or more year-over-year. The United States remains by far the largest cloud market, with a scale that far surpasses the entire APAC region. The U.S. market grew by 22% in the second quarter. In Europe, the largest cloud markets are the UK and Germany, but the largest markets with the highest growth rates were Ireland, Italy, and Spain.
Competitive Dynamics and Outlook
“We are now seeing a more normalized growth in the cloud market, although some obstacles persist. For example, if not for the strengthening of the U.S. dollar, the growth rate in the second quarter would have been approximately one and a half percentage points higher,” said John Dinsdale, Chief Analyst at Synergy Research Group. “As the market continues to advance, competitive dynamics are evolving. The market share of Amazon and Google increased in the second quarter, while Microsoft’s share decreased slightly, though the trends for Microsoft and Google remain upward. Among the next group of companies, Oracle is starting to separate itself to become a top five player, although the gap between it and the leaders remains huge. In this market, Google is nearly five times the size of Oracle, while Amazon is nearly three times the size of Google.”
This expansion and consolidation in the cloud market reflect the growing importance of cloud infrastructure services in the global economy and the opportunities that are opening up for emerging players in this field.