Canalys: Global Cloud Services Spend Up 33%

Cloud infrastructure services continued to be in high demand in Q2 2022, according to a recent report by Canalys. The multi-national market researcher reports that worldwide spending increased 33% year on year to US$62.3 billion, driven by a range of factors, including demand for data analytics and machine learning, data center consolidation, application migration, cloud-native development and service delivery. The growing use of industry-specific cloud applications also contributed to the broader horizontal use cases seen across IT transformation.

The latest Canalys data shows expenditure was over US$6 billion more than in the previous quarter and US$15 billion more than in Q2 2021. The top three vendors in Q2 2022, namely Amazon Web Services (AWS), Microsoft Azure and Google Cloud, together accounted for 63% of global spending in Q2 2022 and collectively grew 42%.

In a global economy rife with inflation, rising interest rates and recession, demand for cloud services remains strong, according to the report. AWS accounted for 31% of total cloud infrastructure services spend in Q2 2022, making it the leading cloud service provider. It grew 33% on an annual basis. Azure was the second largest cloud service provider in Q2, with a 24% market share after growing 40% annually. Google Cloud grew 45% in the latest quarter and accounted for an 8% market share.

“Cloud remains the strong growth segment in tech,” said Canalys VP Alex Smith. “While opportunities abound for providers large and small, the interesting battle remains right at the top between AWS and Microsoft. The race to invest in infrastructure to keep pace with demand will be intense and test the nerves of the companies’ CFOs as both inflation and rising interest rates create cost headwinds.”

“Most companies have gone beyond the initial step of moving a portion of their workloads to the cloud and are looking at migrating key services,” said Canalys Research Analyst Yi Zhang. “The top cloud vendors are accelerating their partnerships with a variety of software companies to demonstrate a differentiated value proposition.”

Canalys defines cloud infrastructure services as those that provide infrastructure-as-a-service and platform-as-a-service, either on dedicated hosted private infrastructure or shared public infrastructure. This excludes software-as-a-service expenditure directly, but includes revenue generated from the infrastructure services being consumed to host and operate them.

Channel Impact^®
Software capabilities and partnerships will be vital to meeting customers’ cloud demands, especially when considering the compute needs of highly specialized services across different verticals. The channel can play a key role in assisting customers who are sorting through the options.