Growth in Public Cloud Spending Slows, Says Synergy

Synergy Research Public Cloud Growth Slows

According to recently released statistics from Synergy Research Group, global company spending on cloud infrastructure services topped $61 billion in Q4. Even while this was a substantial $10 billion increase from the fourth quarter of previous year, it did indicate a slowdown in market growth.

The unusually strong U.S. currency and a severely constrained Chinese market again significantly hindered the 21% increase over Q4 of 2021.

The U.S. market alone, which mainly circumvents those two issues, had growth of 27% in the fourth quarter, compared to an average growth rate of 31% during the preceding four quarters. The market’s expanding size made a decline in growth rate somewhat predictable, but there is little question that the present economic environment also had a negative effect.

Azure vs Google Cloud vs AWS

Microsoft Azure, one of the biggest cloud service providers, had a significant increase in its global market share, which has now reached 23%, up from an average of 21% over the preceding four quarters. Market leader AWS maintained its long-standing range of 32–34% market share, while Google Cloud’s share remained at 11%, unchanged from the previous quarter but an increase of 1% from a year before. The three market leaders collectively controlled 66% of the global market, up from 63% in 2017.

Since the majority of the major cloud service providers (CSPs) have now made their Q4 earnings data public, Synergy estimates that revenues for cloud infrastructure services (including IaaS, PaaS, and hosted private cloud services) were $61.6 billion in the quarter and $227 billion over the prior twelve months.

The majority of the market is made up of public IaaS and PaaS services, which increased by 22% in Q4, according to Synergy’s study. In the public cloud, where the top three providers account for 73% of the market, the major cloud providers’ dominance is even more obvious. Geographically, the cloud business is still expanding rapidly across the board.

Despite the difficult market climate, the global market expanded by $47 billion in 2022 compared to the year before, virtually equal the $49 billion growth seen in 2021. Synergy Research Group expects the global cloud industry to expand rapidly over the coming years as economies strengthen and the foreign currency market stabilizes.