Having established itself as an early leader in the market for cloud infrastructure, Amazon Web Services (AWS), the online retailer’s profitable cloud platform, is still ahead of the pack. According to estimates from Synergy Research Group, Amazon’s market share in the worldwide cloud infrastructure market amounted to 32 percent in the first quarter of 2023, continuing a slight downward trend that saw its market share slip from 34 percent in Q3 2022, to 33 percent in Q4 2022. At the same time, Microsoft gained two points since Q3 2022 and now sits at 23 percent market share, gradually eating away at Amazon’s lead.
In Q1 2023, global cloud infrastructure service spending grew by more than $10 billion compared to Q1 2022, bringing total spending to $63.7 billion for the first three months of this year. Looking at the trailing twelve months, the cloud market is now a $237-billion opportunity, explaining why it’s so fiercely contested. As the following chart shows, Amazon, Microsoft, and Google accounted for two-thirds of cloud infrastructure revenues in the three months ended March 31, with the eight largest providers controlling almost 80 percent of the market.
“There has been some angst about declining cloud growth rates, but the Q1 worldwide market value grew by more than $10 billion compared with the first quarter of 2022. Clearly, the relatively weak economy has caused some enterprises to more closely review spending on cloud services, but the market continues to grow despite those challenges,” John Dinsdale, chief analyst at Synergy Research Group said. “The law of large numbers pretty much dictates that growth rates must decline,” Dinsdale warned, “but in absolute terms, the market continues to grow at a healthy rate, driven by the fundamental benefits of cloud adoption.”
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