Demand for cloud infrastructure services continues to go from strength to strength, with global market data from Canalys revealing a 33% year-on-year rise in spending in this area to $62.3bn during the second quarter of 2022.
The analyst house said cloud infrastructure spending was being sustained by a mix of factors, including demand for data analytics and machine learning technologies, as well as datacentre consolidation projects and enterprises looking to migrate more of their workloads and applications to the public cloud.
“The growing use of industry-specific cloud applications also contributed to the broader horizontal use cases seen across IT transformation,” said Canalys, in its research note.
Cloud spending was up $6bn compared with the first quarter of 2022, and up $15bn on the same quarter last year, with Amazon Web Services (AWS), Microsoft Azure and Google Cloud collectively accounting for 63% of the $62.3bn spent during the second quarter of 2022.
AWS accounted for 31% of the total spend on cloud infrastructure services during the second quarter, while Microsoft accounted for 24% and Google 8%, with Canalys suggesting the market was effectively a two-horse race.
“The hyperscale battle between leader AWS and challenger Microsoft Azure continues to intensify, with Azure closing the gap on its rival,” said Canalys.
“Fuelling this growth, Microsoft pointed to a record number of larger multi-year deals in both the US$100m-plus and US$1bn-plus segments. A diverse go-to-market ecosystem, combined with a broad portfolio and wide range of software partnerships is enabling Microsoft to stay hot on the heels of AWS.”
“Cloud remains the strong growth segment in tech. While opportunities abound for providers large and small, the interesting battle remains right at the top between AWS and Microsoft. The race to invest in infrastructure to keep pace with demand will be intense” Alex Smith, Canalys
To keep up with the demand for their services, both AWS and Microsoft have ambitious plans in place to build out their datacentre infrastructure over the coming year, with Amazon plotting to bring 24 further availability zones across eight cloud regions online. Microsoft, meanwhile, plans to launch 10 new regions over the next 12 months.
“Cloud remains the strong growth segment in tech,” said Alex Smith, vice-president of Canalys. “While opportunities abound for providers large and small, the interesting battle remains right at the top between AWS and Microsoft. The race to invest in infrastructure to keep pace with demand will be intense and test the nerves of the companies’ CFOs [chief financial officers] as both inflation and rising interest rates create cost headwinds.”
To weather some of these pressures, Microsoft used the publication of its fourth-quarter financial results to announce a commitment to extend the useful life of its servers and network equipment from four to six years.
“This will improve operating income and suggests that Microsoft will sweat its assets more, which helps investment cycles as the scale of its infrastructure continues to soar,” added Smith.
“The question will be whether customers feel any negative impact in terms of user experience in the future, as some services will inevitably run on legacy equipment.”
Source is ComputerWeekly.com
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