Cloud spending hits $57bn for Q3

Even as the world braces for an economic slowdown, this quarter saw a huge investment in cloud infrastructure services.

Enterprises spent more than $57.5 billion, primarily on the hyperscalers, representing an $11bn increase over this time last year, Synergy Research found.

That’s despite a strong US dollar and a slowing Chinese market, both of which impacted overall spend.

Google Cloud, which still operates at a loss, was able to increase its market share to 11 percent. But the company continues to trail Microsoft (21 percent) and leader Amazon (34 percent).

Behind the big three comes Alibaba (five percent), IBM (three percent), Salesforce (three percent), Tencent (two percent), and Oracle (two percent).

Baidu, China Telecom, China Unicom, Huawei, Fujitsu, NTT, Snowflake, SAP, and Rackspace all come close to one percent.

“It is a strong testament to the benefits of cloud computing that despite two major obstacles to growth the worldwide market still expanded by 24 percent from last year. Had exchange rates remained stable and had the Chinese market remained on a more normal path then the growth rate percentage would have been well into the thirties,” said John Dinsdale, a chief analyst at Synergy Research Group.

“The three leading cloud providers all report their financials in US dollars so their growth rates are all beaten down by the historic strength of their home currency. Despite that, all three have increased their share of a rapidly growing market over the last year, which is a strong testament to their strategies and performance. Beyond these three, all other cloud providers in aggregate have been losing around three percentage points of market share per year but are still seeing strong double-digit revenue growth. The key for these companies is to focus on specific portions of the market where they can outperform the big three.”

However, the good times may be coming to an end – or at the very least not grow as fast. Amazon Web Services warned that customers were cutting back on cloud spend as the economy slows, while Microsoft Azure missed analysts’ growth expectations. DatacenterDynamics