12 Biggest Cloud Providers by Market Share in the World

Published on January 21, 2023 at 10:42 am by Insider Monkey Team in Lists, News

In this article, we take a look at 12 biggest cloud providers by market share in the world.

Cloud computing is a growing sector.

In cloud computing, there are two sectors, both of which are growing, cloud infrastructure as a service or IaaS, and software as a service or SaaS.

In terms of cloud infrastructure as a service, there aren’t that many big infrastructure as a service cloud providers in the world given the substantial upfront capital needed to be competitive in the field. Considering the cloud infrastructure as a service is very competitive with many of the biggest players constantly cutting their fees for a unit of processing, only the biggest players are profitable. As the leader, Amazon Web Services accounts for a substantial percentage of Amazon’s total profits. Meanwhile, big cloud providers such as Google Cloud are still losing money in an effort to grow their market share.

In terms of the cloud software as a service market, the market is arguably less competitive as it is more segmented. Given many customers subscribe to software as a service providers, there is also recurring revenue potential.

Third Quarter 2022 Cloud Infrastructure Services Industry Growth

While it is very competitive, the cloud infrastructure services market is huge.

According to the Synergy Research Group, total enterprise spending on cloud infrastructure services in the third quarter of 2022 rose more than $11 billion from Q3 2021 to over than $57 billion. During the quarter, the cloud market at the top was very concentrated as the top three players of Amazon, Microsoft, and Google have around two thirds market share globally of the cloud infrastructure services market.

Chief analyst at Synergy Research Group John Dinsdale said of the Q3 industry results, “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% 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. 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.”

In terms of their individual growth rates, Amazon Web Services expanded by 27.5% year over year, Microsoft’s Azure expanded 35% year over year and Google Cloud Platform grew 38% year over year.

Given the growth in the third quarter, the trailing twelve month revenues of the cloud infrastructure services market reached $217 billion according to Synergy Research Group estimates.

Given rising interest rates and macroeconomic uncertainty with a potential recession, some enterprises have become more cautious in their spending and the overall industry spend for the period was less than some estimates.

The Future Growth

Given the tailwinds in the industry in the long term, analysts expect the cloud infrastructure as a service market to grow substantially in the future. According to Research and Market, the global cloud computing market could grow by an average CAGR of 15.7% from 2022 to 2030 to surpass over $1.55 trillion by 2030 as more firms shift to cloud computing for cost savings and flexibility.

One reason for substantially more expected growth is AI processing. As AI applications like ChatGPT gain more popularity, demand for cloud computing could grow further. Considering the amount of cloud computing power needed to make an application as sophisticated as ChatGPT, big tech cloud providers are among the few companies currently that can offer the processing needed to make an application like ChatGPT.

In 2019, Microsoft invested $1 billion into OpenAI in the form of cash and credits for Microsoft’s Azure cloud computing platform. Given ChatGPT has experienced substantial demand since its launch, the company is reportedly looking to raise more capital at around a $30 billion valuation. Once it raises more capital, a substantial amount will likely be spent on cloud processing to make ChatGPT even better, which could bring more business for Microsoft.

Methodology

For our list of 12 Biggest Cloud Providers by Market Share in the World, we list only the market shares of the cloud infrastructure as a service market and not the software as a service market because they are two different markets.

We ranked the cloud providers based on their market shares in the cloud infrastructure service market which includes platform as a service, infrastructure as a service and hosted private cloud services according to Synergy Research Group in Q3 2022.

Because their infrastructure as a service market share is under 2%, we just ranked Dell Cloud, VMware Cloud, Huawei Cloud, and Baidu Cloud as <2% in market share.

For those of you interested, also check out 15 Most Innovative Companies in the World.

12 Biggest Cloud Providers by Market Share in the World

12. Baidu AI Cloud

Worldwide Market Share in Q3 2022: <2%

Baidu AI Cloud is the cloud compute service of Chinese internet search company Baidu. According to the company it provides compute & storage, network & CDN, database, big data, and security services. In 2021, Baidu AI Cloud had around 9% market share in the China Cloud infrastructure services spend market, ranking fourth after Alibaba Cloud, Huawei Cloud, and Tencent Cloud. Because China’s cloud market size is substantial, Baidu AI Cloud is one of the larger IaaS cloud companies globally.

11. VMware

Worldwide Market Share in Q3 2022: <2%

VMware’s cloud infrastructure services is one of the products of VMware, which is a leading provider of multi-cloud services that enables digital innovation with enterprise control. Originally a part of Dell Technologies after the latter’s acquisition of EMC Corp in 2015, VMware spun off from Dell Technologies in November of 2021 so that the company could have more strategic flexibility to potentially grow faster by gaining more freedom to invest in cloud computing.

10. Dell Technologies

Worldwide Market Share in Q3 2022: <2%

In addition to making PCs, Dell Technologies also provides infrastructure as a service with its Dell Technologies Cloud. According to the company, “The Dell Technologies Cloud IaaS model has been invaluable for enterprises. By provisioning and making fully managed servers, storage, networking and other compute resources accessible via the Internet, IaaS offerings allow businesses to avoid the cost and complexity of purchasing and managing their own infrastructure.”

9. Huawei Cloud

Worldwide Market Share in Q3 2022: <2%

Huawei Cloud is the cloud infrastructure computing service provided by Chinese technology company Huawei. Given its market share in China, Huawei Cloud could potentially rank higher on this list but we included it at #9 because Synergy Research Group didn’t rank it among the top eight cloud infrastructure service providers globally in Q3 2022. According to China Internet Watch, Huawei Cloud had 18% market share in the China cloud infrastructure service spend in 2021, more than Tencent Cloud’s 16%, and Baidu AI Cloud’s 9%. Given the company is private, however, it is difficult to determine how much market share it has currently but it certainly ranks among the leaders.

8. Oracle Cloud

Worldwide Market Share in Q3 2022: 2%

Oracle Cloud is database and enterprise software maker’s Oracle Corporation’s IaaS offering where it has around a 2% global market share. In Q2 fiscal 2023, Oracle Corporation’s IaaS sales rose 53% year over year to $1 billion, which is actually a little bit faster than the overall industry’s growth. One reason for the fast growth could be that TikTok routed 100% of the app’s US user traffic to Oracle Cloud Infrastructure as of June 2022. TikTok previously used its own data centers for US traffic.

7. Tencent Cloud

Worldwide Market Share in Q3 2022: 2%

Tencent Cloud is a cloud computing service provided by Chinese social media giant Tencent. According to the company, Tencent cloud has numerous software developers from many different industries using it including Tencent’s own WeChat messaging application. In terms of market share, Tencent Cloud had a 16% market share in the China cloud infrastructure services industry in 2021 and an around 2% market share the cloud infrastructure service market worldwide in Q3 2022.

6. Salesforce

Worldwide Market Share in Q3 2022: 3%

In addition to being a leading SaaS provider, Salesforce Inc offers a platform as a service solution that “allows businesses to easily deploy, run, and manage custom cloud applications without the complexity of building and maintaining their own servers and infrastructure.” With its Salesforce Platform and other services, Salesforce has a worldwide market share of 3% in the cloud infrastructure service market in Q3 2022.

5. IBM Cloud

Worldwide Market Share in Q3 2022: 3%

IBM Cloud has a full stack cloud platform that offers more than 170 products and services including AI/machine learning, analytics, computing, and databases. In the third quarter, the company’s overall cloud sales increased 11% year over year to $5.2 billion and the tech giant had a worldwide market share of around 3% in the cloud infrastructure service market, ranking #5 on our list of 12 Biggest Cloud Providers by Market Share in the World.

4. Alibaba Cloud

Worldwide Market Share in Q3 2022: 5%

Alibaba Cloud is the cloud computing service offered by China’s e-commerce leader, Alibaba Group Holding. Although its growth has slowed in recent years, Alibaba Cloud was the leader with 37% market share in the China cloud infrastructure services market in 2021. For the 12 months ended March 31 2022, Alibaba Cloud also reported a full year profit of $164 million as the business achieved more scale. In Q3 2022, Alibaba Cloud had a worldwide market share of 5% in the cloud infrastructure service market.

3. Google Cloud

Worldwide Market Share in Q3 2022: 11%

Google Cloud, which is a division of Alphabet, is one of the big three cloud providers in the world with a worldwide market share of 11% in the third quarter of 2022 in the cloud infrastructure service market. Google Cloud provides infrastructure and platform services as well as other services for enterprise companies. Given that it trails second place leader Microsoft and first place Amazon Web Services by a substantial amount, Google Cloud has been investing in growth and as a result, its losses widened to $699 million in Q3 2022 versus $644 million Q3 2021. With scaling gains in the future, Google Cloud is nevertheless focused on the path to profitability once it achieves sufficient scale.

2. Microsoft Azure

Worldwide Market Share in Q3 2022: 21%

Microsoft Azure is the world’s second largest cloud infrastructure service provider with a global market share of 21%. According to Statista, Microsoft Azure has been a growth engine for Microsoft as the division generated 46% growth in Q2 fiscal 2022, 46% growth in Q3 fiscal 2022, 40% growth in fiscal Q4 2022, and 35% growth in fiscal Q1 fiscal 2023. In the future, there could be more growth given ChatGPT uses Microsoft Azure for its cloud computing. Microsoft is reportedly considering investing as much as $10 billion in OpenAI, which makes ChatGPT. If Microsoft makes the investment, OpenAI could potentially spend a substantial amount on Microsoft Azure.

1. Amazon Web Services

Worldwide Market Share in Q3 2022: 34%

Amazon Web Services or AWS is Amazon.com’s cloud computing business which leads in the world in terms of scale. In Q3 2022, Amazon Web Services had a 34% market share in the cloud infrastructure service market, which gives it substantial economies of scale that allow it to realize fairly attractive margins. In Q3 2022, AWS sales were $20.5 billion, accounting for 16% of Amazon.com’s total sales. Operating income for the division was $5.4 billion and operating margin was 26.3%. Although its Q3 results were lower than some estimates, many still believe AWS has a lot more growth ahead of it given the expected industry growth in the next decades.

Indeed Amazon Web Services is investing substantial sums for the future as it recently announced plans to invest $35 billion by 2040 to expand its data centers in Virginia that will create 1,000 jobs.

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