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As overall cloud infrastructure market growth drops to 24%, AWS reports slowing • londonbusinessblog.com

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With the big three — Amazon, Microsoft, and Google — reporting revenue this week, we found that the cloud infrastructure market reached $57 billion this quarter, up $11 billion from the same period last year.

That equates to 24% growth, according to data from Synergy research. It may not be the growth we’ve come to expect from this market, but in a time of economic instability it continues to perform remarkably well.

Still, it’s a step back from the time when we grew steadily in the 1930s. It is even lower than in the previous quarter, when the market grew by 29%. So it’s fair to say that growth is slowing in an area that has seen explosive growth in recent years.

Synergy chief analyst John Dinsdale attributed this slowdown to several factors. First of all, there is the law of large numbers, which states that as the market gets bigger, growth decreases. When you combine that with a strong dollar affecting earnings outside the US and a shrinking market in China, it has an effect.

“It is strong evidence of the benefits of cloud computing that, despite two major obstacles to growth, the global market has still grown by 24% from last year. If exchange rates had been stable and the Chinese market had remained on a more normal path, the growth rate would have been well into the 1930s,” Dinsdale said in a statement.

The other news here is that of the big three, Google Cloud was the only one to gain market share, a tick to 11%, as the work CEO Thomas Kurian is doing building the company continues to pay dividends. Meanwhile, Amazon held up as the market leader at 34%, making about $19 billion for the quarter, with Microsoft in second place at 21% with revenues of nearly $12 billion. Google’s 11% came in at about $6 billion.

But that doesn’t tell the whole story like Amazon’s cloud growth slowed to 27.5% in the quarter, down from 33% growth in the previous quarter.

As the graph below illustrates with data from the third quarter to 2017, the market has grown by leaps and bounds over the five-year period, from just over $10 billion to nearly $60 billion.

Cloud infrastructure market share Q32022 compared to other Q3 figures dating back to 2017.

Image Credits: Synergy research

It is also worth noting that only google beat analyst expectations for cloud revenue, while both AWS and Microsoft did not match their predictions. The usual caveats here apply to numbers corresponding to publicly reported amounts. Synergy includes public platforms, infrastructure and hosted private cloud services. Total revenue reported by individual companies may also include other elements not included in Synergy.

The fact is that despite the economic headwinds, the market remains surprisingly strong, and while companies may be looking for places to cut back, as we wrote in June, cutting cloud spending isn’t as easy as it’s fundamental these days. for most companies. . Most companies born in the cloud will not suddenly build a data center, and those in the midst of the transition to the cloud will have to keep moving their workloads because of all the benefits the cloud offers in terms of business agility.

Companies looking to economize can and should look for waste, but either way, the cloud market will likely continue to produce decent numbers, even as the economy forces total revenue and sluggish growth in the near term.

We usually include Canalys data as a comparator in these reports, but the data was not available at the time of publishing. As soon as Canalys publishes its details, we will update the article.

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