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For the last several quarters we ’ve seen a lull in the expansion of the cloud base marketplace , with depressed increment bit than we ’ve been habituate to seeing in the past . That exchange this quarter thanks in large part to interest in productive AI . The new receipts undulation began just last year , driven bythe ChatGPT plug bike , but has already press cloud infra revenue in the fourth quarter of 2023 to $ 74 billion , up $ 12 billion over last twelvemonth at this time and $ 5.6 billionover Q3 , the largest quarter - over - quarter increase the cloud market place has experience , per Synergy Research .
The cloud substructure marketplace for the integral year grew to an eye pop $ 270 billion , up from $ 212 billionin 2022 . Synergy ’s John Dinsdale predicts that the growth we saw in the last year is here to stay , even as the food market continues to mature and the law of nature of large numbers require increase effect . “ Cloud is now a massive market and it takes a lot to move the needle , but AI has done just that . Looking ahead , the law of orotund numbers means that the cloud market will never return to the growth rates seen prior to 2022 , but Synergy does betoken that outgrowth rates will now brace , resulting in vast ongoing annual growth in cloud outgo , ” he said in a statement .
Jamin Ball , a better half at Altimeter Capital , writing in his excellentClouded Judgement newssheet , sees a similarly bright future for these trafficker :
The hyperscalers are really starting to see the tailwind of new workload maturation overtake the headwind of optimizations . Sometimes fresh workload are AI related . Sometimes they ’re classic cloud migrations . The hyperscalers benefit from massive scale , distribution , combine and depth of client relationships in ways no other computer software companionship do . They also are seeing AI revenue ( largely compute ) show up rather than anyone else .
clod ’s data brook Dinsdale ’s claim around diminishing growing rates , but in a mart so heavy , ontogenesis for development ’s sake becomes a far less important metrical :
For now , it appears that Microsoft ’s lucrativeinvestment / partnership with OpenAIis giving it an edge in the market place as we saw the companionship ’s market share develop two full percentage points to 25 % in the fourth poop , a remarkable one - one-quarter increase . Amazon is still king of the wad with 31 % plowshare , albeit down two head from last quarter . It would be easy to say Amazon ’s loss was Microsoft ’s gain , although it ’s probably not quite that simple and there are probably more nuanced impacts across the market . Meanwhile Google held unfaltering at around 11 % share .
Synergy reports that the Big 3 constitute 67 % of overall market portion , or or so $ 50 billion in full cloud revenue coming from the three largest fellowship for a single stern .
From a dollar perspective , the numbers are , per usual , a moment mind boggling , with Amazon coming in at $ 23 billion , Microsoft at $ 18.5 billion and Google with around $ 8 billion . If these numbers do n’t match the account numbers exactly , that ’s because these companies often coalesce different types of cloud tax income to arrive at the reported figures . synergism wait at IaaS , PaaS and hosted individual cloud services , and the companies ’ reported cloud numbers may admit SaaS and other tax revenue that Synergy does n’t consider .
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In terms of quarterly percentage outgrowth , keeping in judgment those caution about how the companies mensurate gross , AWS was up 13 % , Azure was up 30 % and Google Cloud was up around 25 % ( although they do n’t separate out SaaS revenue in that turn ) .
One thing was clear last year , Microsoft was putting the warmth on Amazon and leave thecompany on its heel , perhaps for the first time , with its strong-growing deal making with OpenAI .
Scott Raney , a partner at Redpoint , told TechCrunch at re : Inventin December that Amazon was distinctly play catch up when it came to AI , and it was an unusual position for the troupe to find itself . “ This might be the first time where the great unwashed looked and say that Amazon is n’t in the perch position to take advantage on this monolithic chance . What Microsoft ’s done around Copilot and the factQ comes out [ this week]means that in realism , they ’re perfectly 100 % playing catch - up , ” Raney order at the time .
While procreative AI represents a massive chance for all the swarm vendors , it ’s still very much other days . We always like to say that first to market is a immense advantage , and it surely has been for Amazon all these years . Whether Microsoft ’s aggressive approach to AI exemplify a similar advantage is n’t clean-cut yet , but it ’s arduous to ignore a two percentage point market share increment in a individual quarter . For now it feel like Microsoft has taken the lead when it comes to AI in the enterprise , but Google and Amazon still have plenty of time left on the clock to figure it out .
