The cloud infrastructure market has put the doldrums of 2023 firmly behind it with another big quarter. Revenue continues to grow at a brisk pace, fueled by interest in AI. Synergy Research reports revenue totaled $79 billion for the quarter, up $14.1 billion or 22% from last year.
This marked the third consecutive quarter that year-over-year growth was 20% or more and AI was a big part of that growth, according to Synergy.
The bottom line is that the cloud, in spite of last year’s hiccups, is showing little sign of slowing down. Even with some element of political and economic uncertainty on the horizon, Synergy chief analyst John Dinsdale sees a market that will continue to grow, with the firm expecting the market to double again in four years’ time. It took 13 quarters to double from $40 billion to almost $80 billion (which it will surpass soon).
One surprise this quarter was Microsoft Intelligent Cloud, which includes Azure, missing analysts’ estimates. The company reported $28.52 billion versus analysts’ expectations of $28.68 billion, per CNBC; Azure still grew 30%, per Altimeter partner Jamin Ball, so it wasn’t all bad news.
Dinsdale says that it’s important, however, not to make too much out of the miss. “Microsoft’s Intelligent Cloud quarterly revenues came in within the guidance range provided by Microsoft three months ago. To be growing a $28.5 billion business by 19% a year is no mean feat. Azure is the largest chunk of Intelligent Cloud and it grew by 29% [for the quarter], which is actually rather impressive,” he told TechCrunch.
Amazon reported revenue of $26.3 billion for the quarter, up 19% over the prior year, as it seems to have settled into this growth rate range for the time being after dipping into the 12% and 13% range in early 2023.
Image Credits: Charts courtesy of Jamin Ball, partner at Altimeter Capital
Google Cloud had a nice quarter pushing over $10 billion for the first time, up 29% YoY, per Ball. But it’s important to note his number includes Google Workspace, as well as infrastructure services. More importantly, perhaps, the company gained a full percentage point of market share, according to Synergy, whose numbers don’t include Workspace.
Content Courtesy – Tech Crunch
