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Cloud spending in Q3 Up Over $11bn from 2021

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Q3 enterprise spending on cloud infrastructure services exceeded $57 billion, up $11 billion Q3 of 2021, according to new data from Synergy Research Group.

The news comes despite two headwinds, the first being historically strong US dollar and a severely restricted Chinese market. The spend represents year-on-year growth of 24% and would have been over 30% if exchange rates had remained constant over the last year.

Google increased its market share in Q3 compared to the prior quarter, while Amazon and Microsoft market shares remained largely the same. all three have increased their market share by at least a percentage point compared to the previous year.

“It is a strong testament to the benefits of cloud computing that despite two major obstacles to growth the worldwide market still expanded by 24% from last year. Had exchange rates remained stable and had the Chinese market remained on a more normal path then the growth rate percentage would have been well into the thirties,” said John Dinsdale, a chief analyst at Synergy Research Group.

“The three leading cloud providers all report their financials in US dollars so their growth rates are all beaten down by the historic strength of their home currency. Despite that all three have increased their share of a rapidly growing market over the last year, which is a strong testament to their strategies and performance. Beyond these three, all other cloud providers in aggregate have been losing around three percentage points of market share per year but are still seeing strong double-digit revenue growth. The key for these companies is to focus on specific portions of the market where they can outperform the big three.”

Amazon, Microsoft and Google combined had a 66% share of the global market in the quarter, up from 61% in 2021. All other cloud providers have tripled their revenues since late 2017, though their collective market share dropped from 50% to 34%.

Based on earnings data for Q3, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were $57.5 billion, with twelve-month revenues estimated at $217 billion.

Public IaaS and PaaS services account for the majority of the market which grew by 26% in Q3. The major cloud providers dominated the public cloud market, where the top three control 72%. Geographically, the cloud market continues to grow strongly on a global basis.