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On July 23, 2024
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Gartner says worldwide IaaS public cloud services revenue grew 16.2% in 2023
DUBAI, UAE -- The worldwide infrastructure as a service (IaaS) market grew 16.2% in 2023, to total $140 billion, up from $120 billion in 2022, according to Gartner, Inc. Amazon retained the No. 1 position in the IaaS market in 2023, followed by Microsoft, Google, Alibaba and Huawei. "Cloud technologies continue to be a major business disruptor, due in part to the focus on hyperscalers looking to support offerings related to sovereignty, ethics, privacy and sustainability," said Sid Nag, VP Analyst at Gartner. "This should continue to drive exponential growth into the future with these offerings being spurred by generative AI (GenAI) investments for 2024 and beyond." In 2023, the top five IaaS providers accounted for 82% of the market. Amazon continued to lead the worldwide IaaS market with revenue of $54.6 billion and 39% market share , followed by Microsoft with 23% market share (see Table 1). With growth of 26.3% in 2023, Google moved into the third position at 8.2% market share. Alibaba secured the fourth spot with 7.9% of the market. Table 1. Worldwide IaaS Public Cloud Services Market Share, 2022-2023 (Millions of U.S. Dollars) Company 2023 Revenue 2023 Market Share (%) 2022 Revenue 2022 Market Share (%) 2022-2023 Growth (%) Amazon 54,648 39.0 48,123 39.9 13.6 Microsoft 32,197 23.0 25,889 21.5 24.4 Google 11,454 8.2 9,072 7.5 26.3 Alibaba Group 11,119 7.9 9,222 7.7 20.6 Huawei 5,980 4.3 5,248 4.4 13.9 Others 24,601 17.6 22,943 19.0 7.2 Total 139,999 100 120,497 100 16.2 Source: Gartner (July 2024) "As the top hyperscalers continue to grow their IaaS offerings in the shadow of GenAI, we should also see other areas, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS), grow as well. IaaS is the tide that lifts all boats," said Nag. GenAI is beginning to have an impact on the growth of cloud markets, although AI-driven growth in 2023 was small. "Cloud is the foundational and scalable substrate required to make GenAI a reality. The segments that are beginning to see the impacts of GenAI include IaaS, where AI model training is consuming IaaS resources, and SaaS where GenAI capabilities are beginning to be included in SaaS applications," said Nag. "Capacity demand in public cloud markets has already increased sharply as a result and will continue to do so through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market." Gartner clients can read more in "Market Share: Services, Worldwide, 2023" and "Market Share Analysis: Infrastructure as a Service, Worldwide, 2023." Learn how to maximize the benefits of cloud computing in the complimentary Gartner ebook Devising an Effective Cloud Strategy. -Ends- About Gartner for High Tech Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech. Follow news and updates from Gartner for High Tech on X and LinkedIn using #GartnerHT. Visit the Gartner Newsroom for more information and insights. About Gartner Gartner, Inc. (NYSE: IT) delivers actionable, objective insight that drives smarter decisions and stronger performance on an organization's mission-critical priorities. To learn more, visit gartner.com. CONTACTS: Anisha Pamnani Wallis gartner@wallispr.com
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Global IaaS market grows 16.2% to $140bln in 2023: Gartner
Amazon retained the No 1 position in the IaaS market in 2023, followed by Microsoft, Google, Alibaba and Huawei The worldwide infrastructure as a service (IaaS) market grew 16.2% in 2023, to total $140 billion, up from $120 billion in 2022, according to a leading management consultancy, Gartner. Amazon retained the No 1 position in the IaaS market in 2023, followed by Microsoft, Google, Alibaba and Huawei. "Cloud technologies continue to be a major business disruptor, due in part to the focus on hyperscalers looking to support offerings related to sovereignty, ethics, privacy and sustainability," said Sid Nag, VP Analyst at Gartner. Exponential growth "This should continue to drive exponential growth into the future with these offerings being spurred by generative AI (GenAI) investments for 2024 and beyond." In 2023, the top five IaaS providers accounted for 82% of the market. Amazon continued to lead the worldwide IaaS market with revenue of $54.6 billion and 39% market share, followed by Microsoft with 23% market share. With growth of 26.3% in 2023, Google moved into the third position at 8.2% market share. Alibaba secured the fourth spot with 7.9% of the market. "As the top hyperscalers continue to grow their IaaS offerings in the shadow of GenAI, we should also see other areas, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS), grow as well. IaaS is the tide that lifts all boats," said Nag. GenAI is beginning to have an impact on the growth of cloud markets, although AI-driven growth in 2023 was small. Foundational and scalable substrate "Cloud is the foundational and scalable substrate required to make GenAI a reality. The segments that are beginning to see the impacts of GenAI include IaaS, where AI model training is consuming IaaS resources, and SaaS where GenAI capabilities are beginning to be included in SaaS applications," said Nag. "Capacity demand in public cloud markets has already increased sharply as a result and will continue to do so through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market."- Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).
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Gartner reports significant growth in the worldwide Infrastructure as a Service (IaaS) public cloud services market, with revenue reaching $140 billion in 2023. The market shows resilience and continued expansion despite economic challenges.
The worldwide Infrastructure as a Service (IaaS) public cloud services market demonstrated remarkable resilience and growth in 2023, according to a recent report by Gartner. The market expanded by 16.2% year-over-year, with revenue reaching an impressive $140 billion 1. This substantial growth underscores the increasing reliance on cloud infrastructure across various industries and highlights the sector's ability to thrive even in the face of economic uncertainties.
The IaaS market continues to be dominated by a handful of major players. Amazon retained its position as the market leader, capturing a significant 32% share of the global IaaS market in 2023 2. Microsoft secured the second position with a 23% market share, followed by Google at 11%. These top three providers collectively accounted for 66% of the total market, demonstrating the concentrated nature of the IaaS landscape.
While the global market showed strong growth, regional performances varied. The Middle East and North Africa (MENA) region exhibited particularly robust growth, with the IaaS market expanding by 31.2% year-over-year 1. This impressive regional growth rate, nearly double the global average, indicates the increasing adoption of cloud services in emerging markets.
Several factors contributed to the continued expansion of the IaaS market in 2023. Sid Nag, Vice President Analyst at Gartner, highlighted that organizations are increasingly viewing cloud services as a means to reduce costs and drive business value in uncertain economic times 1. The ability of cloud services to offer scalability, flexibility, and cost-effectiveness has made them an attractive option for businesses looking to optimize their IT infrastructure.
The strong performance of the IaaS market in 2023 sets a positive tone for the future. Gartner predicts that the trend of migrating applications and workloads to the public cloud will continue, driven by the need for business agility and the rapid pace of digital transformation 2. As organizations increasingly recognize the strategic importance of cloud infrastructure, the IaaS market is expected to maintain its growth trajectory in the coming years.
While the market shows robust growth, challenges remain. The concentration of market share among a few top providers raises questions about competition and innovation in the sector. However, this also presents opportunities for smaller players and regional providers to differentiate themselves and capture niche markets. Additionally, the growing emphasis on data sovereignty and regulatory compliance may drive demand for local and specialized IaaS offerings.
Reference
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