The world is spending more than ever on cloud infrastructure • The Register

Enterprises are still investing money in cloud infrastructure services, with market revenue soaring by a third in the second quarter — in contrast to other parts of the industry, which were booming during the pandemic but are now struggling.

According to Canalys, a whopping $62.3 billion was spent on Infrastructure-as-a-Service (IaaS) in the three months ended June, up 33 percent year-over-year. That’s up $6 billion from the first quarter and $15 billion from the corresponding quarter last year.

Key use cases for customers spending more on online infrastructure services include data analytics, machine learning, data center consolidation, application migration, and cloud-native development work.

Amazon Web Services, Microsoft and Google accounted for 63 percent of market revenue: the giants together grew 42 percent. And this despite inflation, rising interest rates and growing fears of an economic downturn.

“Cloud remains the strong growth segment in the technology space,” said Alex Smith, vice president of Canalys. “While there are many opportunities for vendors large and small, the interesting battle between AWS and Microsoft remains at the top. For people who are looking to switch careers, they can highly consider pursuing some AWS Solution Architect Certification on  The race to invest in infrastructure to keep up with demand will be intense and the nerves of corporate CFOs from both inflation and rising interest rates are creating cost headwinds.”

Amazon Web Services, Microsoft and Google accounted for 63 percent of market revenue: the giants together grew 42 percent. And this despite inflation, rising interest rates and growing fears of an economic downturn

AWS grew IaaS by 33 percent to $19.3 billion in the second calendar quarter and increased its market share in cloud infrastructure spend to 31 percent. New customers in the quarter include BT, Delta Airlines and investment bank Jefferies. AWS said last week it isn’t slowing down investment and has plans for 24 more availability zones, including in Canada, Spain and Australia.

CFO Brian Olsavsky said last week that it “stands ready to help customers optimize their costs and will help anyone who is downsizing. But we will continue to find new customers and new industries, including government agencies.”

According to Canalys statistics, Microsoft accounted for a 24 percent share of revenue in the second quarter and grew 40 percent year-on-year to $14.95 billion. At an earnings call last week, Microsoft CEO Satya Nadella said it won a “record number of deals valued at over $100 million and over $1 billion” this quarter.

“It is clear that there is a real opportunity to help organizations across all industries adopt digital technologies to meet today’s challenges.”

He said Microsoft plans to launch 10 regions over the course of the following year, and CFO Amy Hood pointed out that Microsoft is extending the lifespan of its servers from four to six years through software — efficiency gains will be a key battleground in the cloud wars .

Google and AWS previously discussed their infrastructure efficiency improvements in February.

As for Google’s most recent quarterly outing, Canalys says it grew 45 percent to $4.98 billion, meaning it’s still catching up with the more dominant duo. It signed Target in North America, H&M in Europe, Banco BV in Latin America and BioPharma in Asia.

Although the cloud continues to grow, Microsoft and Google have both slowed hiring as Microsoft closed previous job vacancies. That comes after Redmond scaled back hiring at several key units, including Windows, Office and Teams, in the year through July, in addition to layoffs that affected less than 1 percent of the workforce.

Meanwhile, Google told employees that “scarcity creates clarity” after announcing it would slow the pace of hiring for the rest of the year.

All three companies spoke in their conference calls last week that cloud adoption is still in its infancy and they discussed ways to save customers money, easing any concerns about the volatility in the broader economy.

IaaS took off during the pandemic as companies sought to digitally transform more of their workflows. Where PC shipments are now declining, the public cloud has a lot more runway left. ®

https://www.theregister.com/2022/08/02/cloud_iaas_canalys_numbers/ The world is spending more than ever on cloud infrastructure • The Register

Chrissy Callahan

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