AWS: A Temperate Zone Among A Global Climate Of Other Clouds
August 14, 2023 Timothy Prickett Morgan
It might feel like Amazon Web Services has a monopoly on the cloud, but it does not. As it turns out, AWS does not even come close to having a monopoly, which means having somewhere north of 80 percent of the revenue and probably damned near all of the profits in any given market according to our definition.
Synergy Research has just put out its latest quarterly report on cloud revenues by vendor, and AWS is amazingly consistent over the past six years with about a third of revenues across the hundreds of suppliers of infrastructure services, platform services, and hosted private cloud services.
For three quarters in a row now, the cloud market has increased revenues in the aggregate by at least $10 billion in each of those quarters, according to Synergy. In the second quarter ended in June, aggregate cloud revenues across IaaS, PaaS, and hosted private cloud services – what we have started calling outposts in homage to what AWS calls its hoisted private cloud offering, where it puts AWS systems into your premises or a co-location of your choosing but manages it as an extension of its own cloud on your behalf – was up 18 percent year on year and up 3 percent sequentially to $64.8 billion.
AWS, Microsoft Azure, and Google Cloud comprised 65 percent of worldwide cloud infrastructure revenues, with Microsoft climbing steadily over the past six years to reach 22 percent and Google doing the same with an 11 percent share. That leaves AWS with 32 percent share, which is within its traditional range of 32 percent to 34 percent market share. And while the revenue pie for cloud infrastructure grew by 18 percent, adding even 1 percent of market share gain, as both Microsoft and Google have done in Q2 2023, is incredibly difficult.
On a trailing 12-month basis, cloud infrastructure spending added up to a stunning $247 billion, according to Synergy. Growth rates have been cooling in the cloud, of course, because no market can grow at triple digits forever, but it is important to remember that a decade ago, this entire market was a mere $10 billion in size, says Synergy, while companies were spending $80 billion a year in datacenter hardware and software. That on premises spending has grown by 2 percent per year over the decade between 2012 and 2022, but cloud infrastructure services grew by an average of 42 percent per year over the same time, to reach $227 billion in 2022.
Some of that revenue differential, as we have pointed out in the past, is being driven by the premium that clouds charge for their infrastructure to cover power, cooling, facilities, and management costs. So that is not precisely an apples to apples comparison.
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Interesting… thanks