Dive Brief:
- The revenue growth rate for global cloud infrastructure services stalled in the three-month period ending Dec. 31, according to a Synergy Research Group report released Monday.
- Global spending on cloud infrastructure services increased $10 billion year over year, surpassing $61 billion for the quarter. However, the quarterly growth rate fell to 21%, down from 34% at the start of last year.
- Microsoft clinched a 23% share of the market, gaining ground on market leader AWS and growing two percentage points from the previous two quarters. AWS’ share was 33%, down one percentage point from Q3.
Dive Insight:
AWS, Microsoft and Google Cloud continued their dominance in the sector, accounting for two-thirds of the worldwide market for all cloud services and nearly three-quarters of all spending on public cloud, the report said.
Microsoft was the only hyperscaler to gain market share, with third-place Google holding steady from the previous quarter at 11%.
All three market leading companies reported slowdowns in cloud revenue growth during the last three months of 2022. AWS saw its net sales growth rate dip by eight percentage points from the previous quarter. Google Cloud’s posted 32% revenue growth, five percentage points lower than the previous quarter. Revenue growth for Microsoft Cloud dipped two percentage points to 22%.
Some reduction in growth was anticipated, in part due to the massive scale of the global market. But three additional factors impacted cloud spending, John Dinsdale, chief analyst at Synergy Research Group, said in an email:
- The strength of the dollar, which diminished growth rates in non-U.S. markets
- Pandemic restrictions in China
- Increased customer scrutiny over new cloud spending amid an economic contraction
The domestic cloud market, which is largely unaffected by the first two factors, grew at a rate of 27%, five percentage points higher than the global market.
Public infrastructure and platform “as a Service” accounted for the bulk of the cloud market and grew at a slightly higher rate than all cloud services — 22% year over year.
