Cloud infrastructure services: AWS stagnates against a rising Microsoft Azure

Global market shares of cloud infrastructure service providers in the second quarter of 2022. Illustration: Canalys

The provision of IaaS and PaaS services brought more than $62 billion to cloud operators worldwide in the second quarter of 2022. Still number one in the sector, AWS lost market share as its competitor Microsoft Azure sharply reduced the distance that separate them.

The reasons which encourage companies to increase their use of cloud infrastructure services are stronger than the global economic context which would rather encourage them to slow down. In the second quarter of 2022, spending by organizations on carrier IaaS and PaaS services grew by 33% globally year-over-year. According to Canalys, which publishes these figures, they brought in $62.3 billion to cloud operators. As usual, AWS, Microsoft Azure and Google Cloud are the main beneficiaries with 63% (+5 points) of the global market share in value.

Expanded needs and verticalization fuel demand

Continued strong industry growth is driven by demand for data analytics and machine learning services, data center consolidation, application migration, and cloud-native software development. The growing use of industry-specific cloud applications has also contributed to the increase in the number and scale of horizontal use cases seen in a digital transformation framework. While opportunities abound for both large and small cloud infrastructure service providers, the most interesting battle remains at the top between AWS and Microsoftestimates Alex Smith, the vice-president of Canalys.

Indeed, if AWS remains the world number one in the cloud infrastructure services market, the gap that separates it from its runner-up has narrowed further. In the second quarter, the first earned 33% additional revenue from the provision of IaaS and PaaS services and thus captured 31% (-1 point) of the market in value. On the back of 40% growth, Microsoft Azure gained 5 points of market share to 24%. Three years ago, AWS had a 33% market share, compared to 15% for its pursuer. For its part, Google Cloud has only very modestly expanded its footprint, with revenue growth of 45% and a market share of 8% (+1 point) between April and June. Its gains and those of Microsoft Azure are mainly at the expense of operators located outside the top three whose quarterly market shares have collectively fallen 5 points to 37%.

The race to deploy new regions

In the war between Amazon and Microsoft, the latter has the advantages of diversified marketing channels, combined with a large portfolio of offers and partnerships with software publishers. Essential points on which AWS is also actively working. But the battle is also being played out in terms of the deployment of new infrastructure. AWS is to launch 24 Availability Zones in eight regions, while Microsoft plans to open 10 new regions over the next year. Both are increasing their investments outside the US market to meet global demand and ensure the provision of low latency, high data sovereignty services.

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