The cloud infrastructure market had a rough quarter as companies looked for ways to cut back on spending in an uncertain economy, but the market will continue to grow as it remains an affordable and reliable way of storing data. The strong dollar and a weak Chinese market will slow the growth of the cloud infrastructure market, but it is still expected to grow 21% this year.
After growing at a ferocious clip for years, the market appears to be slowing down a bit. However, even with this slowdown, Synergy Research finds that the global market still exceeds $61 billion. This indicates strong growth potential in the near future.
Given the large cloud computing footprints of Amazon, Microsoft, and Google, it is evident that these companies are battle-ready for future opportunities in the market. Whether it be competing for customer base or signing new contracts with larger enterprises, each company seems to have a plan in place to keep its lead over its competitors.
Amazon, Microsoft and Google are constantly vying for market share in the technology sector. However, it is unlikely that any of them will be able to create a an insurmountable lead over the other two companies in terms of revenue. This is primarily due to their offerings being highly specialized; Amazon focuses on web services, Microsoft offers its own cloud platform and Google offers search engine optimization (SEO) services.
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Whereas Amazon cloud revenue continues to be modest, Microsoft and Google have seen marked growth in the past year. While it is difficult to ascertain the reasons for such different outcomes, Google’s decision to focus more on artificial intelligence and machine learning may give them an advantage over Microsoft.
In spite of the fact that Microsoft’s spending was slowing overall, it seems as if the company has been able to gain some advantage in the market due to Amazon’s market maturity finally catching up to it. This may be partly due to Microsoft’s ability to offer not just a good product, but also a competitive price point.
Despite some short-term issues, Synergy believes that the global cloud market will continue to grow strong over the next few years. This is thanks to factors such as the strengthened US dollar and China’s constrained market, which should halt growth for a bit but ultimately result in a larger overall market.
As the global economy slows down, it is possible that rivals of Amazon, such as Walmart and Target, see an opening to take market share. This could be due to increased competition causing Amazon’s revenue growth rate to slow or because they have better prices on their products. In 2023, it will be interesting to see how the macroeconomic environment affects revenue for Amazon and its competitors.
