Synergy Research Group's cloud market numbers are out and once again, they did not disappoint with the group reporting Q1 cloud spending had jumped by over $10 billion from 2022.
Amazon Web Services (AWS) ranks at the top of the charts with Synergy Research Group's latest ranking of the Big 3 cloud providers is out - AWS holds the top spot with 32% of the market.
Specifically, AWS reported today after market close that its segment sales increased 16% year-over-year to $21.4 billion - beating Wall Street expectations.
Despite economic headwinds and customers maximizing their existing cloud spend, AWS's CEO Andy Jassy said on the earnings call, "I think that we continue to see when we talk with customers is that they're, you know, they're they're appropriately cautious about what they're seeing in the economy. And they're trying to find ways to save money as most companies are including our own."
Jassy continued, "We we have a long track record, which we continue to pursue, which I think makes sense for for customers and for our business long term that we're not trying to optimize for a quarter or for a year. We're going to do whatever it takes to help customers be successful over a long period of time ... not short term ways, but smart ways to optimize their costs and to be able to scale up and down and again one of the big advantages of the cloud is that if you grow quickly, you can see a lot but when you we knew that demand you give it back us and stop paying for it."
Similarly, Google Cloud and Microsoft also beat expectations with their earnings reports yesterday with Google Cloud reporting a profit for the first time ever.
The numbers have relieved any angst about declining cloud growth rates, according to John Dinsdale, chief analyst and research director of Synergy Research Group.
"Clearly the relatively weak economy has caused some enterprises to more closely review spending on cloud services, but the market continues to grow despite those challenges," he wrote in an analyst note.
Dinsdale also provided perspective on the global cloud market, writing, "The Chinese market has returned to growth and changing FX rates have now started to produce tailwinds rather than headwinds for cloud growth metrics in the EMEA and APAC regions. The law of large numbers pretty much dictates that growth rates must decline, but in absolute terms the market continues to grow at a healthy rate, driven by the fundamental benefits of cloud adoption. As the market continues to grow, Amazon, Microsoft and Google continue to account for a large share of cloud spending – their combined share stood at 65% in Q1."
Dinsdale told Silverlinings that the group's forecasts show the market continuing to grow at a little over 20% per year over the next five years.
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