US Shows Cloud Market Strength

November 2, 2022

New Q3 data from Synergy Research Group shows that US enterprise spending on cloud infrastructure services grew 30% from last year. Over the last 14 quarters the US year-on-year growth rate has stayed within a 27-34% band, so Q3 was close to the mid-point of this band. While the worldwide Q3 growth rate took a hit from a historically strong US dollar and a severely restricted Chinese market, focusing on US market numbers circumvents those macro issues and demonstrates the underlying, fundamental strength of the cloud market. As the US cloud spending continues to grow by 30%, the market leaders were Amazon, Microsoft and Google who together accounted for 76% of their home market. While their share has gradually increased, at least some smaller cloud providers have been growing more rapidly, most notably Snowflake and MongoDB, the latter via its PaaS offering. Oracle has seen a boost in its cloud growth rate this quarter.

With most of the major cloud providers having now released their earnings data for Q3, Synergy estimates that quarterly cloud infrastructure service revenues in the US (including IaaS, PaaS and hosted private cloud services) were approaching $23 billion, with trailing twelve-month revenues reaching $84 billion. Public IaaS and PaaS services account for the bulk of the market and they continue to grow more rapidly than hosted private cloud services. It is notable that PaaS share of the market is higher in the US than in other parts of the world, demonstrating the more developed nature of the US market.

“Given some of the exceptional circumstances facing markets at the moment, it is important to have a handle on drill-down details in order to better understand the underlying trends and how they might impact future market growth. In this case an analysis of the US cloud market is enlightening,” said John Dinsdale, a Chief Analyst at Synergy Research Group. “US spending on cloud services is now approaching a $100 billion annual run rate and continues to grow by 30% per year, which is pretty unusual for such a large IT market. The growth rates for regional cloud markets beyond the US will bounce back as some of the current exceptional circumstances work their way through the system. This helps to underpin Synergy’s cloud forecasts which continue to show strong growth over the next five years.”