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 stood at 32 percent in the second quarter of 2023, down from 34 percent a year ago. Amazon's main rivals Microsoft and Google saw slightly stronger year-over-year growth, resulting in both increasing their market share by a percentage point compared to last year's June quarter.
In Q2 2023, global cloud infrastructure service spending grew by $10 billion compared to Q2 2022, bringing total spending to $64.8 billion for the three months ended June 30. Looking at the trailing twelve months, the cloud market is now a $247-billion opportunity, explaining why it's so fiercely contested. As the following chart shows, Amazon, Microsoft and Google accounted for almost two thirds of cloud infrastructure revenues in the past quarter, with the eight largest providers controlling almost 80 percent of the market.
"As an ever-larger market keeps on adding $10 billion, the year-on-year growth rate almost inevitably declines, from 20 percent in Q4 2022, to 19 percent in Q1 2023, to 18 percent in Q2 2023. However, there are now tailwinds out there that could change that trajectory a bit," John Dinsdale, chief analyst at Synergy Research Group said. "There are signs that the Chinese market could be heading back towards something closer to normalcy; the macroeconomic environment is slowly heading in the right direction; and many enterprises have now reviewed and optimized their historic cloud usage and are returning to generating new workloads, including generative AI tasks."
