Public cloud services revenue surged past $500bn last year

7 Jul 2023

Image: © kras99/

Microsoft retained the top spot in the overall market, while AWS holds a dominant position in the fast-growing foundational cloud services sector.

The public cloud services market jumped in value by nearly 23pc last year, reaching $545.8bn in global revenue.

A new report by the International Data Corporation (IDC) claims that all sections in this market saw growth last year, with Software-as-a-Service (SaaS) applications retaining the top spot and representing more than 45pc of total revenue last year.

The report found that revenue for foundational cloud services “that support digital-first strategies” grew by nearly of 29pc. The IDC said this increased growth highlights an increasing reliance of enterprises on cloud platforms built around “widely deployed compute services, data/AI services and app framework services”.

Dave McCarthy, vice president in IDC’s worldwide infrastructure practice, said cloud providers are making “significant investments” in high-performance infrastructure, which can help create the “foundation for new AI software that can be quickly deployed at scale”.

This verdict was shared by Rick Villars, group VP of ICD worldwide research, who said the use of AI is starting to “dominate the long-term investment agendas of businesses and cloud providers”.

“Given the economic challenges of the past year, it’s easy to conclude that we are in a period where a focus on constraining new expenditures and optimising the use of existing cloud assets will dominate CIOs’ priorities and shape the fortunes of IT providers for the next several years,” Villars said. “It’s also a very wrong conclusion.”

Microsoft leads the way

The top providers of public cloud services managed to further consolidate their market share last year, according to IDC. Combined, Microsoft, Amazon Web Services (AWS), Salesforce, Google and Oracle captured more than 41% of the worldwide marked last year, a growth of 27.3pc compared to 2021.

Microsoft retained the top spot overall with a total market with 16.8pc last year, followed by AWS at 13.5pc. Microsoft also had the strongest share in the SaaS applications market at 16.4pc, followed by Salesforce at 8.3pc.

In April, Microsoft’s quarterly revenue jumped 7pc to almost $53bn compared to the corresponding period last year, beating Wall Street estimates. The company attributed its investment in ChatGPT and generative AI as the reason for the strong results.

AWS dominated in terms of foundational cloud services however, holding 40.5pc of this growing sector, while Microsoft came second with 21.4pc.

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Leigh Mc Gowran is a journalist with Silicon Republic