The cloud infrastructure revenue growth dipped to 19% in the first quarter, highlighting the impact of budget cuts on IT spending. However, it was still able to hit $63 billion in the quarter, indicating that despite the cost cutting cycle, the market is still holding solid. This growth is due to the benefits of cloud adoption in multiple regions as well as the gradual return of the Chinese market.
Amazon, with its Cloud Services (AWS) arm, remains the largest cloud service provider and has seen its revenue growth rate drop to 16%, a sharp fall from its standard 20%. Microsoft Azure growth also saw a decrease from the previous quarter, declining from a rate of 31% to 27%. Despite slowing growth, Google Cloud was able to reach a profit point for the first time, boasting 27.5% growth.
Amazon holds a commanding one-third of the market share with a resultant revenue figure of more than $20 billion in the quarter. Microsoft followed closely with a 23% market share and over $14 billion for the quarter. Google Cloud also held steady at its 10%, making $6 bln from cloud services.
John Dinsdale, Synergy Research’s chief analyst, believes that while the market growth has weakened and enterprises are closely examining their cloud expenses, the market remains strong and is showing signs of shifts in trends that have been contributing to its slowing down. He further stated that the absolute market value is still growing healthily at a rate of $10 billion – and the recognition of the fundamental benefits of cloud adoption cannot be ignored.
Once again, the cloud industry has given proof of its resilience in a time of economic unrest, as its growth rate approached 20%, markedly less than its usual dipping into the 30s, yet still a significant figure that many industries would still flock to even in our current climate.
