Fueled by enterprise demand for data analytics, machine learning, data center consolidation and cloud-native app development, spending on cloud infrastructure services jumped 33 per cent year-on-year to US$62.3 billion in the second quarter, according to Canalys.
The Singapore-based market research firm said its latest cloud spending research shows that demand for cloud services remains strong despite a global economy suffering from inflation, rising interest rates and recession.
Google, Microsoft and Amazon collectively made up almost two in three dollars spent on cloud infrastructure around the world last quarter, Canalys noted.
The firm defines cloud infrastructure services as those that provide IaaS (infrastructure-as-a-service) and PaaS (platform-as-a-service), either via private or public hosting environments. It excludes direct sales for SaaS (software-as-a-service) applications, but includes revenue from the infrastructure services used to host and operate them.
According to Canalys’ figures, AWS alone accounted for about one third of global cloud infrastructure revenue in the second quarter of 2022, or $19.3 billion out of $62.3 billion overall, representing a 33 per cent year-on-year increase in Amazon’s figures. Azure was in second place, with 24 per cent of the market after 40 per cent annual growth, and Google Cloud took third, with 45 per cent growth accounting for 8 per cent of total market share.
Azure’s growth rate means that Microsoft has continued to close in on Amazon for primacy in this market, according to Canalys. Vice president at the research firm, Alex Smith, said that Microsoft’s record number of major deals in the US$100 million and US$1 billion ranges is the product of a wide product portfolio and tight integration with software partners.
“While opportunities abound for providers large and small, the interesting battle remains right at the top between AWS and Microsoft,” he said in a statement announcing Canalys’ results. “The race to invest in infrastructure to keep pace with demand will be intense and test the nerves of the companies’ CFOs as both inflation and rising interest rates create cost headwinds.”
Cloud providers build out infrastructure
Despite those headwinds, however, both Amazon and Microsoft have continued to aggressively build out capacity, according to the researchers—the latter company has announced 10 new cloud regions, to become available in the next year, and the former has announced eight, divided into 24 new availability zones in the same time frame.
According to Canalys research analyst Yi Zhang, demand is likely to continue to increase, as companies move more and more core parts of their infrastructure into it.
“Most companies have gone beyond the initial step of moving a portion of their workloads to the cloud and are looking at migrating key services,” he said in a statement. “The top cloud vendors are accelerating their partnerships with a variety of software companies to demonstrate a differentiated value proposition. Recently, Microsoft pointed to expanded services to migrate more Oracle workloads to Azure, which in turn are connected to databases running in Oracle Cloud."