According to Synergy Research Group, cloud services spending hit $178 billion in 2021, a 37% increase over the $130 billion spent in 2020 and twice the amount corporations spend on their data centers. Total cloud spending in the fourth quarter of 2021 was $50.5 billion.
When the COVID-19 pandemic struck in 2020, it prompted a significant shift in global IT operations and spending to the cloud, as companies began to work from home. Even as the pandemic fades and firms call employees back to work, this pattern is set to continue.
Synergy's lead analyst, John Dinsdale, believes the cloud business will continue to grow at a rapid pace. "There is no doubt that the cloud market will continue to expand at a rapid pace." Leading cloud providers should be able to continue aggressively growing their revenues in this scenario," he added via email.
The market, on the other hand, is far from settled. In certain regions, there is growth, while in others, there is decline. With a market share of 33%, Amazon Web Services (AWS) maintains the industry leader. Over the previous five years, AWS has remained stable at 33%, give or take a percentage point or two.
AWS continues to grow, according to Dinsdale, despite maintaining flat in terms of market share. "The graph depicted market share rather than revenue. Its market share may be stable at roughly 33%, but that is a stable share of a big market that is rapidly growing. He wrote, "AWS's continuing revenue growth is actually rather impressive."
Over the last five years, Microsoft, on the other hand, has had consistent growth. It has increased from around 13% in 2017 to around 21% in 2021. This, according to Dinsdale, is due to Microsoft's top-down concentration on the cloud, as well as a long-term program of continuous substantial investment in its cloud and data center infrastructure.
"Microsoft also benefited from existing enterprise partnerships in all regions and nations through its server and software offerings." So it's a mix of focus, financial backing, and a global brand that appeals to businesses," he explained.
As of the fourth quarter of 2021, Google has a global market share of around 10% of the cloud services industry, followed by China's Alibaba with a market share of 6%.
"Others" and IBM, which has gone from around 8% share in 2017 to 4% share in 2021, are the two groups that are changing to the downside.
However, figures can be misleading. According to Dinsdale, IBM's cloud revenues are still expanding, albeit at a slower rate than Amazon, Microsoft, and Google. So IBM isn't losing ground in terms of revenue; it's just not gaining ground as quickly as the competition.
The same can be said for businesses in the "others" category. Oracle, Salesforce, NTT, Fujitsu, and Rackspace are among the companies that have consistently lost market share. All, like IBM, are growing revenues, but not as swiftly as the market leaders or the market as a whole, according to Dinsdale.