Cloud computing, often referred to simply as “cloud,” has grown at a rapid pace in the recent years. According to Gartner, the worldwide end-user spending on public cloud services was $491 billion in 2022, which is expected to grow at 21.7% to reach $597.3 billion in 2023. Synergy Research estimates the 2022 market size at a slightly higher $544 billion.

While the numbers vary, the trend reflected is the same—high growth and opportunity. At such a juncture, the question arises: Is there more room for growth? With about 90% of global IT spending still on-premises and not yet in the cloud, there is ample scope for further penetration. And this is why cloud computing is an important business segment for almost all major technology players, making it a highly competitive space.

Here’s an overview of the three major companies that command 65% of the market share.

1. Amazon (AMZN)

Amazon’s Amazon Web Services (AWS) pioneered cloud computing in 2006 and is a dominant player in this space. AWS continues to maintain its long-standing market share in the band of 32-34%. Among segments of cloud market, Amazon continues to lead the infrastructure-as-a-service (IaaS) market with a 40% market share. Back in FY2017, AWS earned $17.46 billion in revenue constituting 9.8% of overall revenue. The revenue increased to $25.66 billion, $35.02 billion, $45 billion and 62.2 billion in FY2018, FY2019, FY2020 and FY2021, respectively. AWS earned $80.1 billion in revenue in FY2022 (January-December), an increase of 29% year-over-year. During Q1FY2023 (January- March), AWS reported a revenue increase of 16% year-over-year to $21.4 billion. AWS contributes around 16% to Amazon’s overall revenue.

Amazon continues to invest and innovate AWS. During the Q1 earnings call, Amazon’s President and Chief Executive Officer Andy Jassy said, “We are not close to being done inventing in AWS. Our recent announcement on large language models and generative AI and the chips and managed services associated with them is another recent example. And in my opinion, few folks appreciate how much new cloud business will happen over the next several years from the pending deluge of machine learning that’s coming.”

In the recent quarter, AWS announced new commitments with American Family Insurance, Duke Energy, Brookfield Asset Management, Southwest Airlines, S&P Global, Zurich Insurance Group, BBVA, T-Mobile, Marvell and Iberdrola, among others. Amazon will report its Q2FY2023 earnings on August 3.

2. Microsoft (MSFT)

Microsoft’s focus on cloud computing under the guidance of Satya Nadella has led to positive results. The company has gained market share as well as revenue. Microsoft cloud now commands 23% of the market (Q1CY2023), up from 13% just five years back (Q1CY2018). Within the cloud space, Microsoft is second in the IaaS market with a 21.5% market share while it leads the SaaS applications market segment. Microsoft is committed to research and development and entered multiple acquisitions and partnerships to make its cloud platform more efficient and robust. Microsoft’s 2022 annual report reads, “We are building Azure as the world’s computer, with more than 60 datacenter regions—more than any other provider—delivering faster access to cloud services while addressing critical data residency requirements.” In January this year, Microsoft announced the acquisition of Fungible to accelerate data center innovation.

In Q3FY2023 (January–March), Microsoft’s revenue stood at $28.5 billion translating to 53.87% of its overall revenue compared to 47.36% during the same quarter last year. During FY2022 (July–June), Microsoft reported a 32% year-over-year increase in its cloud revenue to $91.2 billion compared to $69.1 billion in FY2021. In the first nine months of FY2023, Microsoft’s cloud revenue has already reached $81.3 billion. Microsoft is expected to report earnings for FY2023 on July 25, 2023.

3. Google (GOOGGOOGL)

Google, a subsidiary of Alphabet, has done a tremendous job catching up with market leaders to establish a place for itself in the cloud space. Google’s market share was barely visible until a few years back with its cloud revenue of $4.05 billion just making 3.7% of its overall revenue in FY2017 (January-December). By Q2CY2020, Google’s market share reached 9% and its revenue touched double-digit figures at $13.06 billion in FY2020. In FY2021, cloud revenue was recorded at $19.2 billion, which reached $26.28 billion in FY2022. During Q1FY2023 (January-March), cloud business reported a revenue of $7.45 billion constituting 10.68% overall revenue. During the earnings call, Sundar Pichai, CEO Alphabet and Google, said, “Over the past three years, GCP’s annual deal volume has grown nearly 500%, with large deals over $250 million, growing more than 300%. Nearly 60% of the world’s 1,000 largest companies are Google cloud customers. And many leading startups and millions of small and medium enterprises use Google cloud.”

To strengthen its cyber security defense, Google cloud acquired Mandiant, a leader in dynamic cyber defense, threat intelligence and incident response services in 2022. Companies such as Airbus, PayPal, P&G, The Home Depot, Equifax, UPS, King and CardinalHealth are some of its customers. Q2FY2023 earnings will be announced by Alphabet on July 25.

In addition to the big three players, some of the fastest growing and significant companies in the cloud computing market are Oracle (ORCL), Snowflake (SNOW), MongoDB (MDB), Huawei,, Inc. (CRM), IBM, Adobe (ADBE), Alibaba (BABA), SAP (SAP), Cisco (CSCO), Digital Realty (DLR), Inspur, Dell (DELL) and VMWare (VMW).


The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. Data based on earnings report, research reports by Synergy Research ad Gartner.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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