Enterprise cloud spending jumps to nearly $65B in Q2, says Synergy Group

Aug. 6, 2023
The research firm notes that this is the third successive quarter in which the cloud market has grown by $10 billion from 2022.

Enterprise spending on cloud infrastructure services came to nearly $65 billion worldwide, up by $10 billion from the second quarter of 2022, according to Synergy Research Group.

The year-on-year cloud services growth rate was 18% in the second quarter, down from 19% in the previous quarter and 20% in the fourth quarter of 2022. Second-quarter spending was up by 3% from the first quarter, like the quarter-on-quarter growth rate in the second quarter of last year.

Synergy noted that while the “current economic climate has crimped some growth in cloud spending, the market continues to expand at a healthy rate despite those short-term challenges.”

Google, Microsoft, and Amazon still dominate

Google and Microsoft, representing the largest cloud provider group, saw more robust year-on-year growth numbers, which helped drive up their worldwide market share by a percentage point from the second quarter of last year. These companies’ second-quarter worldwide market shares were 22% and 11%, respectively.

Amazon meanwhile, Amazon retained its market share band of 32-34%, though Synergy noted it was towards the bottom end of that range. The three leaders accounted for 65% of the worldwide market. Among the tier-two cloud providers with the highest year-on-year growth rates include Oracle, Snowflake, MongoDB, VMware, Huawei and China Telecom.

Public IaaS and PaaS drive revenues

As the majority of the major cloud providers have now released their earnings data for the second quarter, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were $64.8 billion, with trailing twelve-month revenues reaching $247 billion. Public IaaS and PaaS services, which account for the bulk of the market, grew by 19% in the second quarter.

Major cloud providers' dominance is even more pronounced in the public cloud, where the top three control 72% of the market. Geographically, the cloud market continues to grow strongly in all world regions. In terms of area, Asia-Pacific had the most robust growth, with India, China, Australia, and South Korea growing by well over 20% year over year.

Synergy said that the growth rate of cloud spending “continues to nudge down” due to several factors, including macroeconomic pressures, some belt-tightening by enterprises, local market issues in China, and the law of large numbers. Despite slower growth rates, the quarterly market continues to grow by $10 billion from 2022. With the Chinese market potentially returning to somewhat more normal circumstances, many economic pressures easing, and enterprises having rationalized historic cloud usage and spending, Synergy expects future cloud growth rates to remain buoyant. 

For related articles, visit the Business Topic Center.

For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer’s Guide.

To stay abreast of fiber network deployments, subscribe to Lightwave’s Service Providers and Datacom/Data Center newsletters.

Sponsored Recommendations

Coherent Routing and Optical Transport – Getting Under the Covers

April 11, 2024
Join us as we delve into the symbiotic relationship between IPoDWDM and cutting-edge optical transport innovations, revolutionizing the landscape of data transmission.

Data Center Network Advances

April 2, 2024
Lightwave’s latest on-topic eBook, which AFL and Henkel sponsor, will address advances in data center technology. The eBook looks at various topics, ranging...

Supporting 5G with Fiber

April 12, 2023
Network operators continue their 5G coverage expansion – which means they also continue to roll out fiber to support such initiatives. The articles in this Lightwave On ...

FTTx Deployment Strategies

March 29, 2023
Cable operators continue to deploy fiber in their networks at anincreasing rate. As fiber grows in importance, proper choices regardinghow to best fit fiber to the home together...