In this article, we take a look at the 12 largest cloud providers by market share in the world. If you want to see the largest cloud providers by market share in the world, go directly to 5 Largest cloud providers by market share in the world.
Cloud computing is a growing sector.
In cloud computing, there are two sectors, which are growing, cloud infrastructure as a service or IaaS, and software as a service or SaaS.
Regarding cloud infrastructure as a service, there are not that many large infrastructure as a service cloud providers in the world given the substantial initial capital required to be competitive in the field. Considering the cloud infrastructure as a service is very competitive with many of the largest players constantly cutting their fees for a processing unit, only the largest players are profitable. As the leader, Amazon Web Services accounts for a substantial percentage of Amazon’s total profits. Meanwhile, big cloud providers like Google Cloud are still losing money in an effort to grow their market share.
In terms of the cloud software as a service market, the market is arguably less competitive as it is more segmented. Since many customers subscribe to the software as a service provider, there is also recurring revenue potential.
Third Quarter 2022 Cloud Infrastructure Industry Growth
While highly competitive, the market for cloud infrastructure services is huge.
According to Synergy Research Group, total enterprise spending on cloud infrastructure services in the third quarter of 2022 grew by more than $11 billion from Q3 2021 to more than $57 billion. During the quarter, the cloud market at the top was highly concentrated as the top three players of Amazon, Microsoft and Google have about two-thirds of the global market share of the cloud infrastructure services market.
Synergy Research Group chief analyst John Dinsdale said of the industry’s Q3 results: “It is a strong testament to the benefits of cloud computing that, despite the two major obstacles to growth, the global market is still expanded by 24% from last year. If the exchange rates have been stable and the Chinese market has been on a more normal path, then the percentage of the growth rate has been well into the thirties. I three major cloud providers report all their financials in US dollars, so their growth rates are all beaten by the historical strength of their home currency.”
In terms of their individual growth rates, Amazon Web Services grew by 27.5% year-on-year, Microsoft’s Azure grew 35% year-on-year and Google Cloud Platform grew 38% year-on-year.
In view of the growth in the third quarter, the revenue of twelve months of the cloud infrastructure services market reached $ 217 billion according to the estimates of Synergy Research Group.
Given the rise in interest rates and macroeconomic uncertainty with a potential recession, some companies became more cautious in their spending and overall industry spending for the period was less than some estimates.
Future growth
Given the long-term industry winds, analysts expect the cloud infrastructure as a service market to grow substantially in the future. According to Research and Market, the global cloud computing market could grow at an average CAGR of 15.7% from 2022 to 2030 to exceed more than $1.55 trillion by 2030, as more businesses move to computing in cloud for cost savings and flexibility.
One of the reasons for substantially more growth than expected is the AI transformation. As AI applications like ChatGPT gain more popularity, the demand for cloud computing could grow further. Considering the amount of cloud computing power required to run a sophisticated application like ChatGPT, the big tech cloud providers are among the few companies currently that can offer the processing needed to run an application like ChatGPT.
In 2019, Microsoft invested $1 billion in OpenAI in the form of money and credits for Microsoft’s Azure cloud computing platform. Since ChatGPT has experienced substantial demand since its launch, the company is reportedly looking to raise more capital at around a $30 billion valuation. Once it raises more capital, a substantial amount will likely be spent on cloud processing to make ChatGPT even better, which could bring more business for Microsoft.
Methodology
For our list of the 12 Largest Cloud Providers by Market Share in the World, we only list the market shares of the cloud infrastructure as a service market and not the software as a service market because they are both different markets.
We ranked cloud providers based on their market shares in the cloud infrastructure services market which includes platform as a service, infrastructure as a service and hosted private cloud services. according to Synergy Research Group in Q3 2022.
Because their infrastructure as a service market share is below 2%, we just ranked Dell Cloud, VMware Cloud, Huawei Cloud and Baidu Cloud as <2% in market share.
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12 Largest cloud providers by market share in the world
12. Baidu AI Cloud
Global Market Share in Q3 2022: <2%
Baidu AI Cloud is the cloud computing service of the Chinese internet search company Baidu. According to the company, it provides compute and storage services, network and CDN, database, big data and security services. In 2021, Baidu AI Cloud had about 9% market share in China Cloud infrastructure services spending market, the fourth place after Alibaba Cloud, Huawei Cloud and Tencent Cloud. Because the size of the cloud market in China is substantial, Baidu AI Cloud is one of the largest IaaS cloud companies in the world.
11. VMware
Global Market Share in Q3 2022: <2%
VMware cloud infrastructure services is one of the products of VMware, which is a leading provider of multi-cloud services that enables digital innovation with enterprise control. Originally a part of Dell Technologies after the acquisition of EMC Corp by the latter in 2015, VMware separated from Dell Technologies in November 2021 so that the company could have more strategic flexibility to potentially grow faster by acquiring more freedom to invest in cloud computing.
10. Dell Technologies
Global Market Share in Q3 2022: <2%
In addition to making PCs, Dell Technologies also provides infrastructure as a service with its Dell Technologies Cloud. According to the company, “The Dell Technologies Cloud IaaS model has been invaluable for companies. To provide and make fully managed servers, storage, networks and other computing resources accessible via the Internet, the IaaS offering allows companies to avoid the cost and complexity of procurement. and manage their own infrastructure.”
9. Huawei Cloud
Global Market Share in Q3 2022: <2%
Huawei Cloud is the cloud infrastructure computing service provided by the Chinese technology company Huawei. Given its market share in China, Huawei Cloud could potentially rank higher on this list, but we included it at 9 because Synergy Research Group did not rank it among the top eight cloud infrastructure service providers in the world in Q3 2022. According to China Internet Watch, Huawei Cloud had a market share of 18% in the cloud infrastructure service in China spend in 2021, more than 16% of Tencent Cloud, and 9% of Baidu AI Cloud. Since the company is private, however, it is difficult to determine how much market share it currently has, but it certainly ranks among the leaders.
8. Oracle Cloud
Global Market Share in Q3 2022: 2%
Oracle Cloud is Oracle Corporation’s IaaS offering of database and enterprise software where it has approximately 2% global market share. In Q2 fiscal 2023, Oracle Corporation’s IaaS sales increased 53% year over year to $1 billion, which is actually slightly faster than overall industry growth. One reason for the rapid growth could be that TikTok has routed 100% of its US app user traffic to Oracle Cloud Infrastructure by June 2022. TikTok previously used its own data centers for the United States traffic.
7. Tencent Cloud
Global Market Share in Q3 2022: 2%
Tencent Cloud is a cloud computing service provided by the Chinese social media giant Tencent. According to the company, Tencent cloud has numerous software developers from many different industries using it, including Tencent’s WeChat messaging application. In terms of market share, Tencent Cloud had a 16% market share in the cloud infrastructure services industry in China in 2021 and a market share of about 2% in the cloud infrastructure services market worldwide in Q3 2022.
6. Salesforce
Global Market Share in Q3 2022: 3%
In addition to being a leading SaaS provider, Salesforce Inc offers a platform as a service solution that “enables businesses to easily deploy, run and manage custom cloud applications without the complexity of building and maintaining their servers and infrastructure”. With its Salesforce platform and other services, Salesforce has a global market share of 3% in the cloud infrastructure services market in Q3 2022.
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Disclosure: None. 12 Largest cloud providers by market share in the world is originally published on Insider Monkey.