While Microsoft made headlines this week for its AI implementation, and Alphabet suffered a big setback in stocks Due to its slight loss in cloud, Amazon's growth has quietly settled into low double-digit growth.
And it still has a strong grip on the huge cloud infrastructure market, precisely because it was the first, and the others continue to catch up years after its launch. To get an idea of how big Amazon's advantage is, you can see it in this data from Synergy Research: “The relative scale of its cloud operations now shows that Microsoft is twice the size of Google, with Amazon being about equal to the other two combined. «
This quarter, Synergy reports that the market for cloud infrastructure reached more than 68 billion dollars worldwide, an increase of $10,5 billion or 18% from the previous year. It was the fifth consecutive quarter that the cloud market grew by that amount, and it's good for a run rate of around $257 billion, a huge market that continues to grow.
What is the result in terms of market share figures? Well, Microsoft continues increasing its share impressively, gaining another point last quarter to 23%, while Amazon has been virtually stable for years at around 33% and Google was stable at 11% during the previous quarter. That's roughly $22.400 billion for Amazon, $15.600 billion for Microsoft, and $7.400 billion for Google (as you can see, Synergy's math works).
Keep in mind, however, that these percentages correspond to a growing revenue pie, so holding steady still represents substantial growth in a market that has been growing around $10 billion per quarter for the last five quarters.
Despite that, cloud growth had begun to slow for the first time this year due to economic uncertainty, cost cutting and less experimentation by large companies. This took its toll, particularly on Amazon, but this quarter AWS stabilized at around 12% growth, the same as last quarter. While facing changing market dynamics, Amazon is also facing the law of large numbers, where as it grows, it becomes much more difficult to sustain previous growth. He challenged that law for a long time, but appears to have caught up with it.
As generative AI begins to take hold this year, it is already starting to have an impact, and we could start to see an acceleration as demand for cloud services grows to store, process and manage the large amounts of data required to run large languages. models, not to mention the sheer computing power that LLMs consume.
Microsoft appears to be the first to have benefited from this with its multibillion-dollar investments in OpenAI, but it's still early days, and Amazon and Google are also likely to benefit from that demand in the coming quarters, as both have also been adding products and services. to address this market change at a rapid pace.
Microsoft reported 29% Azure growth last quarter, and while Google Cloud was up 22% year over year, it had a cloud profit loss of $8,41 billion versus $8,64 billion for the market expected. The Alphabet shares have been punished, despite good numbers in other divisions.
As usual, it's important to note that Google Cloud's revenue figures include its SaaS offerings, and Synergy only counts IaaS, PaaS, and hosted private cloud services, which accounts for the difference in Google's overall publicly reported number. and the number reported by Synergy.
While startups may not care about this race around cloud market share, it is worth understanding how other buyers and investors perceive the largest players and how their orchestrations affect a market that many startups will use. to build your initiatives.
