Canalys: Global Cloud Spending Grows in Q1

Published On: June 2, 2024Categories: Buzz

According to a report by Canalys, worldwide cloud infrastructure services expenditure grew by 21% year-on-year in Q1 2024 to reach US$79.8 billion, an increase of US$13.4 billion. The top three cloud providers – AWS, Microsoft Azure and Google Cloud – collectively grew by 24%, accounting for 66% of total spending. All three hyperscalers experienced a growth rate surge, as enterprise cloud spending accelerated. However, Microsoft outpaced both AWS and Google Cloud, with sales rising by 31% year-on-year, nearly double AWS’s growth rate of 17%, while Google Cloud grew 28% year-on-year. 

Enterprises are shifting their focus from optimizing cloud budgets toward investing in new initiatives, fueled by a potential AI integration. According to Canalys, all three of the top hyperscalers saw an increase in the number of multi-year commitments from enterprise customers, suggesting that many businesses are readying themselves for a long-term increase in cloud consumption. 

“There is significant variation in the strategies of the top three hyperscalers, reflected in their differing growth rates,” said Yi Zhang, Analyst at Canalys. “Microsoft’s end-to-end portfolio is proving to be a strong competitive moat, while Google’s strength in AI is giving it a strong tailwind. However, AWS’ recent US$4 billion investment in Anthropic for generative AI and its ongoing AI integration in its cloud services underscores a determination to stay ahead of the pack as business priorities shift to AI.”  

“The convergence of AI and cloud represents a transformative juncture, reshaping how businesses approach technology for innovation and growth. Businesses must navigate the complexities of optimizing costs associated with AI infrastructure, including compute resources, storage and data processing, while ensuring that investments in AI technologies yield tangible returns,” said Alex Smith, VP at Canalys. “Looking ahead, cloud service providers as a whole will endeavor to capitalize on this trend by embedding AI in their products and solutions, making AI integration not something novel, but the norm.” 

Channel Impact®
Fueled by the AI revolution, enterprises are reevaluating their entire technology stack, signaling a significant inflection point for cloud computing. However, the process of transitioning to the cloud can be intricate and financially burdensome, which potentially hinders the adoption of AI. Addressing these transition costs and challenges represents a formidable opportunity for the channel.

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