Amazon Web Services (AWS), Microsoft, and Google dominate the global public cloud market, except in China, where local providers hold the leadership, according to a recent report from Synergy Research Group.
The report reveals that AWS, Microsoft, and Google maintain market shares of 32%, 23%, and 12% respectively, solidifying their position as the top players in the global public cloud space. No other company has managed to surpass a 5% market share. Following the tech giants, companies like Alibaba, Oracle, and Salesforce rank next, though they have not achieved significant global market shares.
The report also highlights the excessive reliance of American companies on the European ecosystem. David Carrero, co-founder of Stackscale (Grupo Aire), points out that in Europe, there needs to be more focus on supporting local companies to drive cloud and infrastructure growth without as much dependence on foreign firms, many of which enforce “vendor lock-in.”
Regional Differences in the Cloud Market
In China, the landscape is different. Here, Alibaba leads the market followed by Tencent, China Telecom, and Huawei. In fact, the top ten companies in the cloud provider ranking in China are all local. This contrast underscores how regulatory barriers and local competition have shaped the Chinese market, significantly setting it apart from the rest of the world.
Geographically, the United States remains the largest cloud market, followed by China, Japan, the United Kingdom, Germany, and India. The dominance of the major tech companies is reflected in their ability to maintain a global network of nearly 600 hyperscale data centers. In the second quarter of the year, these companies invested over $50 billion in capital expenditures, primarily to build and upgrade their infrastructures.
Projection for Mergers and Acquisitions in the Data Sector
Synergy Research Group also foresees a significant increase in mergers and acquisitions (M&A) of data centers, expected to reach record levels in 2024. The total value of transactions to date this year amounts to over $36 billion, with another $7 billion in pending deals.
The report highlights that 2021 and 2022 were record years for M&A, with deals valued at around $50 billion. Major transactions in those years included acquisitions of companies like CyrusOne, Switch, CoreSite, and QTS, each valued at over $10 billion. In Spain, there were also some acquisitions such as the data centers in the Canary Islands of Idecnet, acquired by Grupo Aire.
The growing demand for data center capacity, driven by the growth of cloud services, social networks, and a variety of digital services, has spurred this increase in transactions. Additionally, the rise of generative artificial intelligence is fueling additional demand. Private capital has played a crucial role in these transactions, accounting for between 85% and 90% of the total value since 2021, highlighting data centers as an attractive and secure long-term investment.
John Dinsdale, Chief Analyst at Synergy Research Group, emphasizes that the cloud and data center market continues to evolve rapidly. “The demand for capacity keeps increasing, and specialized data center operators often are not able to finance these investments on their own. This has led to a significant influx of private capital in the sector,” Dinsdale concluded.
This landscape underscores how the major global cloud providers continue to dominate the market worldwide, while local dynamics in China and the growth of the data center sector offer new opportunities and challenges for the industry.