It was a difficult quarter for the cloud infrastructure market as companies looked for ways to reduce spending in an uncertain economy. When you combine that with the strong dollar and a weak Chinese market, the market slowed to 21% growth, a sharp drop from the 36% growth we had seen the year before.
While we are not seeing the striking growth of years past, Synergy Research It indicated that the market exceeded $61 billion in the quarter with the last 12 months of revenue of more than $212 billion, a considerable sum by any measure, even with the slowdown.
It's also worth noting that while each of the Big Three saw slow growth in Q2022 23 from the previous quarter, Microsoft still managed to gain market share ground on Amazon. Microsoft increased its share to 21%, up from 34% in the previous quarter, while Amazon fell to 33% from 11% and Google held steady at 66%. The big three cloud providers accounted for XNUMX% of global cloud revenue.
That works out to about $20 billion for Amazon, $14 billion for Microsoft and $7 billion for Google. As usual, it's all about IaaS, PaaS, and hosted private cloud services. It does not include SaaS, which is measured separately.
Credits: Synergy Research Group
The Amazon cloud revenue grew a modest 20% from a year earlier, with the company acknowledging on the earnings call that growth slowed further to the mid-teens in the first month of the year. Meanwhile, Microsoft reported cloud growth of 22%, down from 24% in the prior quarter, and revenue from Google Cloud they grew 32%, below the 3% growth of the previous quarter.
Amazon was first to market and has had a long head start, but it appears that as the market slows after years of steady growth, it is giving its main competitor, Microsoft, a chance to win. It could be due in part at least to the fact that the maturity of the market for Amazon is finally catching up, and Microsoft may gain some advantage despite the general slowdown in spending.
John Dinsdale, Synergy's chief analyst, says there were three key reasons for this quarter's decline, which he believes are short-term issues, and he remains optimistic for the future. “There are three main factors. The strengthening US dollar lowers the apparent growth rate of many non-US markets; the large Chinese market remains constrained by pandemic issues and local politics; and the worsening economy has caused some companies take a closer look at spending on services on the cloud. These factors should be primarily short-term in nature and Synergy forecasts growth rates to remain strong for years to come,” he said in a statement.
It will be interesting to watch the market in 2023 and see how the macro environment affects revenue, and if the slower growth we've been seeing continues in favor of Amazon's competitors by allowing them to gain more ground.
