Global cloud services spending has reached just below US$50 billion amid a surge in demand, according to research from Canalys and Synergy.
For Q3 2021, Canalys said worldwide spending on cloud infrastructure services increased 35 percent to US$49.4 billion, citing ongoing remote working and learning, and the growing use of industry-specific cloud applications. Synergy Research Group meanwhile said spending grew 37 percent to US$45 billion, citing contributions from the non-”big three” providers.
The growth was fueled by ongoing digital transformation efforts to ensure business continuity during pandemic-related disruptions, resulting in geographic data centre expansion to meet the demands, according to Canalys.
Synergy added that while the big three hyperscalers, Amazon Web Services, Microsoft Azure and Google Cloud, are still dominant, the next ten largest providers saw 28 percent year-on-year revenue growth, and the following medium-to-small providers grew 25 percent.
However Canalys said the sector is expected to start being impacted by the global chip shortage, with some data centre component providers reporting longer lead times and higher prices.
“Overall compute demand is out-growing chip manufacturing capabilities, and infrastructure expansion may become limited for the cloud service providers,” Canalys research analyst Blake Murray said.
“Besides managing supply chains to the best of their abilities, the providers building an advantage are focused on developing their go-to-market channels along with their product portfolios to catch up with an increasingly wide variety of customer use cases that has fueled demand since the start of the pandemic.”
The research added that the hyperscalers have responded to the shortages through advancing industry-specific service portfolios and growing their channels to bring more diverse offerings.
AWS remains the market leader, with Canalys’ research pegging its share to 32 percent of total spend, while Microsoft and Google are at 21 percent and 8 percent respectively. Synergy’s research has a slight variation of 33 percent, 20 percent and 10 percent, respectively.
“Given their scale, ever-expanding worldwide presence and impressive revenue growth rates, it is understandable that Amazon, Microsoft and Google grab the most attention for their cloud activities. However, that makes it easy to overlook the fact that other cloud providers generated $17 billion in the quarter, a figure which grew by 27% from last year,” Synergy Research Group chief analyst John Dinsdale said.
“By any standards a US$17 billion market growing at such a rate is an attractive proposition for many service providers and their suppliers. Clearly there are challenges with the big three companies lurking in the background, so the name of the game is not competing with them head on. Providing companies are smart about targeting the right applications and customer groups, cloud can provide a broad and exciting range of growth opportunities for them.”