Global enterprise spending on cloud infrastructure services hit $84 billion, in the third quarter (Q3) of 2024, marking an increase of $15.7 billion or 23% year-over-year, according to the latest report from Synergy Research Group.
These figures represent the fourth consecutive quarter of accelerating growth, largely driven by the rise of generative AI (GenAI).
The report noted adoption of the technology has spurred market demand despite ongoing economic, currency and geopolitical uncertainties.
John Dinsdale, chief analyst and research director for Synergy, explained AI technology is now infused into a whole raft of cloud services.
“Many of those services have been around for a while but AI is helping to enhance the capabilities of those services,” he said.
Amazon remains the market leader with a 31% share, followed by Microsoft and Google, holding 20% and 13%, respectively.
The report noted all three have improved their growth rates compared to the previous year, with Amazon and Google showing particularly strong gains.
“Amazon had a huge first mover advantage,” Dinsdale said. “It got serious about investing in cloud technology and services for external clients several years before the other main cloud providers.”
He explained by the time they also started to focus more on cloud, Amazon was very advanced in its network, capabilities and client base.
“Amazon has continued to put pedal to the metal and has constantly improved the scale, scope and breadth of its cloud services,” he added. “It has also had an impressive focus on putting clients first.”
In the tier-two cloud provider space, Oracle, Huawei, Snowflake and Cloudflare posted the highest year-over-year growth.
“Other are following, but it has been tough to catch up with Amazon—the leader of the pack– and they are continuing to run hard and fast,” Dinsdale said.
He added none are really able to challenge the big three head on; Snowflake and Cloudflare are focused more on specific niches.
“Huawei doesn’t have the scale and is constrained by its Chinese heritage and geopolitics,” Dinsdale explained. “Oracle is now doing well in terms of developing its cloud business but is such a long way behind the big three.”
David Eller, data product manager at Indicium, pointed out another crucial factor is AWS’s extensive global infrastructure.
“AWS operates data centers across numerous regions worldwide, providing low latency and high availability,” he said.
This global presence enables AWS to effectively serve customers, regardless of their location.
“AWS’s commitment to continuous innovation has also been instrumental in maintaining its competitive edge,” Eller added.
The company regularly introduces new services and features, staying ahead of industry trends and addressing emerging demands.
“These strategic factors have enabled AWS to retain its lead, even as competitors like Microsoft and Google experience faster growth rates in the cloud computing sector,” he explained.
IaaS and PaaS Dominant Components
Synergy’s data revealed global Q3 revenues for cloud infrastructure services—including infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and hosted private cloud– reached an estimated $83.8 billion, with trailing twelve-month revenues approaching $313 billion.
Public IaaS and PaaS services remain the dominant components of the cloud market, growing by 24% year-over-year.
The top three providers command 68% of the public cloud sector, underscoring the concentrated market power of Amazon, Microsoft and Google.
The report also revealed regional growth remains robust across the globe, with major gains reported in India, Japan, Brazil and Italy, each growing faster than the global average when measured in local currencies.
The United States continues to dominate as the largest cloud market, showing a 23% growth in Q3, significantly outpacing the Asia-Pacific region in scale.
Within Europe, the UK and Germany are the largest cloud markets; however, Ireland, Italy and Spain demonstrated the highest growth rates.
Dinsdale noted cloud adoption is increasing rapidly everywhere, explaining it has tended to take off first in markets that are typically at the leading edge of technology adoption, and countries that are home to the big technology companies.
“It’s also growing rapidly in big country markets that warranted an early focus from the cloud providers,” he said. “But others are also growing quickly, even if they are a little behind.”
