The worldwide infrastructure as a service (IaaS) market grew 29.7 per cent in 2022, to $120.3 billion, up from $92.8 billion in 2021, according to Gartner.
Amazon retained the top position in the IaaS market in 2022, followed by Microsoft, Alibaba, Google and Huawei.
Gartner VP analyst Sid Nag said that Cloud had been elevated from a technology disruptor to a business disruptor.
“IaaS is driving software-as-a-service (SaaS) and platform-as-a-service (PaaS) growth as buyers to continue to add more applications to the cloud and modernise existing ones.”
“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,” added Nag.
“This is expected to continue until mid-2023 and is a natural outcome of the market’s maturity. We expect an acceleration in 2024, as there is still room for additional growth.”
In 2022, the top five IaaS providers accounted for over 80 per cent of the market. Amazon continued to lead the worldwide IaaS market with revenue of $48.1 billion and a 40 per cent market share.
Microsoft followed in the second position with 21.5 per cent 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 came in third with 7.7 per cent market share, although with modest 2.4 per cent year-over-year growth. While Alibaba continued to lead the IaaS market in China, its limited potential for expansion across global markets slowed growth, driving its recent decision to spin off its Alibaba Cloud business into a separate entity.
Google saw the highest growth rate of the top five IaaS vendors, growing 41 per cent in 2022 to reach over $9 billion in revenue. Google’s increased investment in sovereign cloud and expanded sales and marketing partner programmemes helped to broaden its customer base and drive additional IaaS revenue.
Huawei rounded out the top five IaaS vendors with 4.4 per cent market share and $5.2 billion in revenue for 2022. Since its 2020 pivot to an increased focus on the cloud, Huawei has steadily grown its IaaS revenue in China and emerging markets.
“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.”
