Home Internet Cloud infrastructure market kept growing in Q2, reaching $42B – TechCrunch

Cloud infrastructure market kept growing in Q2, reaching $42B – TechCrunch


In baseball, it’s often said that a prospect has a high ceiling, reflecting the tremendous potential of a young player with plenty of room to improve. The same could be said for the cloud infrastructure market, which keeps growing with little sign of slowing down soon. The market hit $42 billion in total revenue, with all major vendors reporting up to $2 billion from Q1.

Synergy Research reports that the revenue grew at a brisk 39% clip, the fourth consecutive quarter that it has increased. AWS led the way per usual, but Microsoft continued growing rapidly, and Google kept the momentum.

AWS continues to defy market logic, increasing growth by 5% over the previous quarter at 37%, an amazing feat for a company with the market maturity of AWS. That accounted for $14.81 billion in revenue for Amazon’s cloud division, putting it close to a $60 billion run rate, good for a market-leading 33% share. While that share has remained fairly steady for several years, the revenue grows as the market pie grows ever larger.

Microsoft grew even faster at 51%, and while Microsoft cloud infrastructure data isn’t always easy to nail down, with 20% of market share according to Synergy Research, that puts it at $8.4 billion as it continues to push upward with revenue up from $7.8 billion last quarter.

Cloud infrastructure

Google, too, continued its slow and steady progress under the leadership of Thomas Kurian, leading the growth numbers with a 54% increase in cloud revenue in Q2 on revenue of $4.2 billion, good for a 10% market share, the first time Google Cloud has reached double figures in Synergy’s quarterly tracking data. That’s up from $3.5 billion last quarter.

After the Big 3, Alibaba held steady over Q1 at 6% (but will only report this week), with IBM falling a point from Q1 to 4% as Big Blue continues to struggle in pure infrastructure as it makes the transition to more of a hybrid cloud management player.

John Dinsdale, the chief analyst at Synergy, says that the Big three are spending to help fuel this growth. “Amazon, Microsoft, and Google in the aggregate are typically investing over $25 billion in capex per quarter, much of which is going towards building and equipping their fleet of over 340 hyperscale data centers,” he said in a statement.

Meanwhile, Canalys had similar numbers but saw the overall market slightly higher at $47 billion. Their market share doubled to Amazon with 31%, Microsoft with 22%, and Google with 8% of that total number.

Canalys analyst Blake Murray says that companies are shifting workloads to the cloud to help achieve environmental sustainability goals as the cloud vendors are working toward using more renewable energy to run their massive data centers.

“The best practices and technology utilized by these companies will filter to the rest of the industry, while customers will increasingly use cloud services to relieve some of their environmental responsibilities and meet sustainability goals,” Murray said.

Whether companies are moving to the cloud to get out of the data center business or because they hope to piggyback on the sustainability efforts of the Big 3, companies are continuing a steady march to the cloud. With some estimates of worldwide cloud usage at around 25%, the potential for continued growth remains strong, especially with many markets still untapped outside the U.S.

That bodes well for the Big 3 and other smaller operators who can find a way to tap into slices of market share that add up to big revenue. “There remains a wealth of opportunity for smaller, more focused cloud providers, but it can be hard to look away from the eye-popping numbers coming out of the Big 3,” Dinsdale said. It’s hard to see the ceiling for these companies at any time in the foreseeable future.


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