We examine the ten Biggest Cloud Providers by market share in this article:
Software as a service, or SaaS, and cloud infrastructure as a service, or IaaS, are the two growing sectors of cloud computing. In terms of cloud infrastructure as a service, there aren’t that many big infrastructure as a service cloud providers in the world because they require a lot of upfront capital to compete in the market.
Due to the intense competition in the cloud infrastructure as a service market, where many of the major players are constantly lowering their prices per unit of processing, only the major players are profitable. Amazon Web Services, the market leader, contributes a sizeable portion of the company’s overall profits. In the meantime, major cloud service providers like Google Cloud continue to incur losses in an effort to expand their market share.
Due to its greater segmentation, the cloud software as a service market is arguably less competitive. There is also potential for recurring revenue given that many customers subscribe to software as a service providers.
Growth of the Cloud Infrastructure Services Industry in the Third Quarter of 2022 Despite its fierce competition, the market for cloud infrastructure services is huge.
The Synergy Research Group says that enterprise spending on cloud infrastructure services increased to over $57 billion in the third quarter of 2022, up more than $11 billion from the third quarter of 2021. The cloud infrastructure services market was highly concentrated during the quarter due to the top three players—Amazon, Microsoft, and Google—holding approximately two thirds of the global market share.
John Dinsdale, chief analyst at Synergy Research Group, commented on the Q3 industry results, “It is a strong testament to the benefits of cloud computing that the worldwide market still expanded by 24% from last year despite two major obstacles to growth.” The growth rate percentage would have been well into the 30s if exchange rates remained stable and the Chinese market remained on a more normal course. As a result of the fact that the three most prominent cloud service providers report their financials in US dollars, their respective growth rates are all hampered.
Amazon Web Services experienced a year-over-year growth rate of 27.5%, Microsoft Azure experienced a growth rate of 35%, and Google Cloud Platform experienced a growth rate of 38%.
Synergy Research Group estimates that the cloud infrastructure services market’s trailing twelve-month revenues reached $217 billion due to growth in the third quarter.
Some businesses have cut back on spending as a result of rising interest rates and macroeconomic uncertainty, including the possibility of a recession, and overall industry spending for the period was lower than some estimates.
The Market for Cloud Infrastructure as a Service Analysts anticipate significant future growth in the market due to the industry’s long-term tailwinds. Research and Market predicts that as more businesses adopt cloud computing for cost savings and flexibility, the global market for cloud computing will surpass $1.55 trillion by 2030, growing at an average CAGR of 15.7% from 2022 to 2030.
AI processing is one reason for substantially more growth that is anticipated. Demand for cloud computing may rise further as AI applications like ChatGPT gain popularity. Big tech cloud providers are one of the few businesses that can currently provide the processing required to create an application like ChatGPT, considering the amount of cloud computing power required.
In the form of cash and credits for Microsoft’s Azure cloud computing platform, Microsoft made a $1 billion investment in OpenAI in 2019. Since its launch, ChatGPT has been in high demand, so the company is reportedly looking to raise additional capital at a valuation of around $30 billion. It is likely that a significant amount of money will be spent on cloud processing to improve ChatGPT, which could result in more business for Microsoft once it raises additional capital.
Because software as a service and cloud infrastructure as a service are distinct markets, we only list the market shares of the cloud infrastructure as a service market on our list of the 12 biggest cloud providers by market share worldwide.
According to Synergy Research Group in Q3 2022, we ranked the cloud providers based on their market shares in the cloud infrastructure service market, which includes hosted private cloud services, platform as a service, and infrastructure as a service.
World’s 10 Biggest Cloud Service Providers by Market Share
Amazon Web Services
1. Amazon Web Services, also known as AWS, is the global leader in terms of scale for Amazon.com’s cloud computing business. Amazon Web Services had a 34 percent market share in the cloud infrastructure service market in the third quarter of 2022. This gives it a lot of economies of scale and lets it make pretty good margins.
AWS’s sales of $20.5 billion in the third quarter of 2022 represented 16% of Amazon.com’s total sales. The division made $5.4 billion in operating income, and its operating margin was 26.3%. Even though AWS’s Q3 results were lower than some estimates, many people still think the company has a lot of room for growth given the industry’s expected growth over the next few decades.
Indeed, Amazon Web Services is making significant investments for the future. The company recently announced that it will spend $35 billion by 2040 to expand its data centers in Virginia, which will result in the creation of 1,000 jobs.
2. With a 21 percent share of the global market, Microsoft Azure is the second largest cloud infrastructure service provider in the world. Microsoft Azure has been a growth engine for the company, according to Statista, as the division experienced growth of 46% in the second quarter of fiscal 2022, 46% in the third quarter of fiscal 2022, 40% in the fourth quarter of fiscal 2022, and 35% in the first quarter of fiscal 2023.
Given that ChatGPT makes use of Microsoft Azure for its cloud computing, there may be further expansion in the future. OpenAI, the company behind ChatGPT, is said to be considering making a $10 billion investment in Microsoft. OpenAI could potentially spend a significant amount on Microsoft Azure if Microsoft makes the investment.
3. With a worldwide market share of 11% in the third quarter of 2022 in the cloud infrastructure service market, Google Cloud, a division of Alphabet, is one of the major three cloud providers worldwide. Enterprise companies can take advantage of a variety of services offered by Google Cloud, including platform and infrastructure services.
Google Cloud’s losses increased to $699 million in Q3 2022 from $644 million in Q3 2021 as a result of investing in growth despite the fact that it trails Microsoft and Amazon Web Services by a significant amount. Google Cloud is still focused on the path to profitability once it reaches sufficient scale, despite future gains in scaling.
4. Alibaba Cloud is a cloud computing service provided by Alibaba Group Holding, China’s leading e-commerce company. In the China cloud infrastructure services market in 2021, Alibaba Cloud held a 37% market share, despite slowing growth in recent years.
As the company expanded, Alibaba Cloud also reported a $164 million full-year profit for the 12 months ended March 31, 2022. In the global market for cloud infrastructure services in the third quarter of 2022, Alibaba Cloud held a market share of 5%.
5. More than 170 products and services, including AI/machine learning, analytics, computing, and databases, are available on the IBM Cloud full stack cloud platform.
The tech giant had a global market share of approximately 3% in the cloud infrastructure service market, placing it fifth on our list of the 12 Biggest Cloud Providers by Market Share in the World. In the third quarter, the company’s overall cloud sales increased by 11% year over year to $5.2 billion.
6. In addition to being a leading SaaS provider, Salesforce Inc. provides a platform as a service solution that “allows businesses to easily deploy, run, and manage custom cloud applications without the complexity of building and maintaining their own servers and infrastructure.” This is in addition to the company’s position as a leading SaaS provider. In the third quarter of 2022, Salesforce had a global market share of 3% in the cloud infrastructure service market thanks to its Salesforce Platform and other services.
7. Tencent Cloud is a cloud computing service offered by Tencent, a major player in Chinese social media. The company claims that Tencent’s own messaging app, WeChat, and numerous software developers from a variety of industries use Tencent cloud. In terms of market share, Tencent Cloud held a 16% market share in the industry of cloud infrastructure services in China in 2021 and a 2% market share in the global market for cloud infrastructure services in Q3 2022.
8. The database and enterprise software provider Oracle Corporation’s IaaS offering, 2% Oracle Cloud, holds approximately 2% of the global market share. Oracle Corporation’s IaaS sales increased by 53% year over year to $1 billion in the second quarter of fiscal 2023, slightly faster than the industry as a whole. As of June 2022, TikTok shifted 100 percent of the app’s US user traffic to Oracle Cloud Infrastructure, which may have contributed to the rapid growth. For US traffic, TikTok previously utilized its own data centers.
9. The cloud infrastructure computing service provided by the Chinese technology company Huawei is called 2% Huawei Cloud. We included Huawei Cloud at number nine because Synergy Research Group did not rank it among the top eight cloud infrastructure service providers worldwide in Q3 2022. However, given its market share in China, Huawei Cloud could potentially rank higher on this list. In 2021, according to China Internet Watch, Huawei Cloud possessed a market share of 18% in China’s spending on cloud infrastructure services, surpassing Tencent Cloud’s 16% and Baidu AI Cloud’s 9%, respectively. Despite the fact that the business is private, it is difficult to estimate its current market share, but it is unquestionably among the leaders.
10. With its Dell Technologies Cloud, Dell Technologies not only manufactures personal computers but also offers infrastructure as a service. “The Dell Technologies Cloud IaaS model has been invaluable for enterprises,” the business claims. IaaS offerings enable businesses to avoid the expense and complexity of purchasing and managing their own infrastructure by provisioning and making fully managed servers, storage, networking, and other compute resources accessible via the Internet.