In Q2 2023, global cloud service spending will reach US$72.4 billion, a year-on-year increase of 16%

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Global spending on cloud infrastructure services grew 16% to $72.4 billion in the second quarter of 2023. This growth rate is down from the previous quarter (19%). In the second quarter of 2023, the top three providers AWS, Microsoft Azure and Google Cloud will increase by 20%, accounting for 65% of the total spending, down from 22% in the first quarter. While both AWS and Microsoft’s growth slowed, Google Cloud’s growth rate remained steady at 31% compared to the previous quarter.

Stronger dollar’s impact on hyperscalers is fading.

In the current business environment, where the focus is on cost containment, cloud providers must ensure a large influx of new customers and workloads to drive revenue growth. The emergence of artificial intelligence technologies is introducing new cloud workloads and will drive huge demand for computing power, creating new opportunities for cloud growth. Notably, during the quarter, both AWS and Microsoft launched new AI-focused partner programs, recognizing the importance of working with partners to drive customer adoption of their AI offerings.
Amazon Web Services (AWS) continues to lead the cloud infrastructure services market in the second quarter of 2023, accounting for 30% of total spending, up 12% year-over-year. AWS’s growth has more than halved since the same period last year. Faced with slowing revenue growth, AWS is aggressively increasing its investments in artificial intelligence.

Microsoft Azure captured 26% of the market after growing at a 26% annual rate, making it the second-largest cloud service provider in the second quarter of 2023. Business performance is expected to remain stable as its cloud order backlog grows 19% to $224 billion in the second quarter of 2023.

Google Cloud will grow 31% year-over-year in the second quarter of 2023, accounting for 9% market share, the strongest growth among the top three hyperscale cloud computing providers. Google’s practice of extending the depreciation period for servers and network equipment has helped rein in operating costs and boosted Google Cloud’s profitability. Google Cloud’s partner ecosystem will continue to support the development of its generative AI applications.