Worldwide IaaS Public Cloud Services Revenue Exceeds $100 Billion For First Time: Gartner

The worldwide infrastructure-as-a-service (IaaS) market grew 29.7% to cross the $100 billion mark for the first time, reaching $120.3 billion in 2022, according to consulting company Gartner. The market rose from $92.8 billion in 2021.

Amazon retained the top spot in the IaaS market in 2022, followed by Microsoft, Alibaba, Google, and Huawei. The top five IaaS providers made up over 80% of the worldwide market this year, according to Gartner.

“IaaS is driving software-as-a-service (SaaS) and platform-as-a-service (PaaS) growth as buyers continue to add more applications to the cloud and modernise existing ones,” said Sid Nag, vice president and analyst at Gartner. “IaaS growth in 2022 was stronger than expected, despite a slight softening in the fourth quarter as customers focused on using their previously committed capacity to its fullest potential. This is expected to continue until mid-2023,” Nag said.

With revenue of $48.1 billion and a market share of 40%, Amazon continued to lead the market. Microsoft followed in second place with a 21.5% market share, reaching over $25 billion in IaaS public cloud revenue in 2022. Microsoft’s software-first strategy continued to support its IaaS growth as customers required more cloud capacity to support automation, advanced analytics, and digital workplace capabilities.

Alibaba Group took the third spot again with a 7.7% market share and revenue of $9.2 billion, but with only 2.4% year-over-year growth. While Alibaba continued to lead the IaaS market in China, its limited potential for expansion across global markets has slowed growth, driving its decision to spin off its cloud business, Cloud Intelligence Group, into a separate entity.

Among the top five IaaS vendors, Google witnessed the highest growth rate of 41% in 2022 to cross $9 billion in revenue and take the fourth position. The company’s increased investment in sovereign cloud and expanded sales and marketing partner programs helped to broaden its customer base and drive additional IaaS revenue.

Huawei stood fifth with a 4.4% market share and $5.2 billion in revenue. Since its 2020 pivot to an increased focus on the cloud, Huawei has been steadily growing its IaaS revenue in China and emerging markets.

Other IaaS providers totalled $22.7 billion in revenue and made up the remaining 18.9% of the market.

“Generative AI will continue to drive the cloud market forward, particularly as hyperscalers look to support offerings beyond the existing, democratised generative AI solutions,” said Nag. “As enterprises integrate generative AI into their technology portfolio, new markets and opportunities for cloud hyperscalers will emerge related to sovereignty, ethics, privacy, and sustainability.”