The latest data from Synergy Research Group reveals that enterprise spending on cloud infrastructure services surpassed $76 billion worldwide in the first quarter, representing an increase of $13.5 billion or 21% compared to the first quarter of 2023. This is the second consecutive quarter in which the annual growth rate has significantly improved, with the first quarter seeing the highest growth since the third quarter of 2022. Despite some economic, monetary, and political headwinds, the underlying strength of the market is more than compensating for these obstacles, aided largely by the impact of generative AI technology and services. In terms of competitive positioning, Amazon maintains a strong leadership in the market, although Microsoft and Google recorded the strongest annual growth numbers. The three saw their growth rates substantially increase over the past two quarters. Their global market shares in the first quarter were 31%, 25%, and 11% respectively. Among second-tier cloud providers, those with the highest annual growth rates include Huawei, Snowflake, MongoDB, and Oracle.
With most major cloud providers having already released their earnings data for the first quarter, Synergy estimates that revenues from cloud infrastructure services (including IaaS, PaaS, and hosted private cloud services) were $76.5 billion, with trailing twelve-month revenues reaching $283 billion. Public IaaS and PaaS services represent the majority of the market and grew 23% in the first quarter. The dominance of the major cloud providers is even more pronounced in the public cloud, where the top three represent 72% of the market. Geographically, the cloud market continues to grow strongly across all regions of the world. Measured in local currencies, the APAC region saw the strongest growth, with India, Japan, Australia, and South Korea growing by over 25% year-over-year. The US remains by far the largest cloud market, with a scale that surpasses the entire APAC region. The US market grew 20% in the first quarter.
“Synergy reported that in late 2022 and much of 2023, cloud market growth rates were abnormally low, constrained by external factors. We anticipated growth rates would rebound, and that is what we are seeing now,” said John Dinsdale, chief analyst at Synergy Research Group. “In terms of annualized rate, we now have a $300 billion market growing at 21% per year. We will not return to the growth rates seen before 2022 as the market has become too massive to grow so quickly, but we will see the market continue to expand substantially. We predict it will double in size over the next four years.”
Source SGResearch