According to the latest data provided by Synergy Research Group, revenues for cloud services and infrastructure markets reached $427 billion in the first half of 2024, representing a 23% growth compared to the same period last year.
Change in Growth Trends
One notable aspect of this evolution is the recent shift in growth trends. Historically, cloud services growth rates have far exceeded spending on cloud data center infrastructure. However, this trend has temporarily reversed, driven by strong investments in generative artificial intelligence technology.
In the first half of 2024, growth in IaaS, PaaS, and SaaS averaged 21%, while spending on public and private cloud data centers grew at an average of 30%. Despite this shift, it is important to note that the cloud services market remains twice as large as spending on data center support.
Expansion of Hyperscale Operator Infrastructure
Hyperscale operators like AWS, Azure, or Google Compute continue to drive the overall IT market, and their infrastructure footprint continues to grow. Compared to the first half of 2023, the operational capacity of their already extensive data center network grew by 24%. Even more impressive is the 47% increase in the size of their future data center portfolio, reflecting the ongoing acceleration of their investments.
Market Leaders
In the SaaS and cloud infrastructure services field, the overall market leaders are Microsoft Azure, Amazon Web Services, Google Compute, IBM, and Salesforce. When it comes to hardware and software for data centers, Original Design Manufacturers (ODMs) continue to represent a significant portion of the market, as hyperscale providers use custom-designed servers supplied by contract manufacturers. Beyond ODMs, market leaders include Dell, Microsoft, Super Micro, and HPE. In this segment, Nvidia is rapidly increasing its influence by selling to server providers, other tech companies, enterprises, and directly to hyperscale providers.
Geographical Distribution
While cloud markets are growing strongly in all regions of the world, the United States remains the gravity center. In the first half of 2024, the U.S. accounted for 44% of all cloud services revenues, 53% of hyperscale data center capacity, and 47% of the cloud data center hardware and software market.
The vast majority of leading players in all service and infrastructure markets are U.S. companies, followed by Chinese companies representing 8% of all cloud services revenues and 16% of hyperscale data center capacity.
Impact of Artificial Intelligence
John Dinsdale, chief analyst at Synergy Research Group, commented on these results: "Cloud markets were already growing strongly, and AI has further boosted that growth. We see this particularly in the deployment of new hyperscale data centers and the expansion of existing ones."
Dinsdale also highlighted an interesting aspect of this growth: "In the first half of the year, Nvidia’s data center business revenues far exceeded the combined revenues of Dell and HPE in data centers."
This report from Synergy Research Group provides a detailed insight into the current state and trends in the cloud market, reflecting the significant impact of new technologies and changing industry dynamics.
Source: RG Research