Global spending on infrastructure-as-a-service (IaaS) increased significantly in 2023. The market grew by 16.2 per cent in 2023 to touch reach $140 billion, up from $120 billion in 2022.
According to the research firm Gartner, Inc., Amazon, which leads the cloud services market, retained the No. 1 position in the IaaS market in 2023, followed by Microsoft, Google, Alibaba, and Huawei.
The top five IaaS providers accounted for 82 per cent of the market. With a market share of 39 p.c., Amazon continued to lead the worldwide IaaS market with a revenue of $54.6 billion. Microsoft followed with a market share of 23 per cent., while Google moved into third position with an 8.2 market share. Alibaba settled for the fourth place with a share of 7.9 per cent.
“Cloud technologies continue to be a major business disruptor, due in part to the focus on hyperscalers looking to support offerings related to sovereignty, ethics, privacy and sustainability,” said Sid Nag, Vice-President Analyst at Gartner.
“This should continue to drive exponential growth into the future with these offerings being spurred by generative AI (GenAI) investments for 2024 and beyond,” Nag said.
“As the top hyperscalers continue to grow their IaaS offerings in the shadow of GenAI, we should also see other areas, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS), grow as well. IaaS is the tide that lifts all boats,” he added.
He said the cloud was the foundational and scalable substrate required to make GenAI a reality. The segments that were beginning to see the impacts of GenAI include IaaS, where AI model training was consuming IaaS resources, and SaaS where GenAI capabilities were beginning to be included in SaaS applications, he pointed out.
“Capacity demand in public cloud markets has already increased sharply as a result and will continue to do so through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market,” he said.