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Home Market data

Google and Microsoft close gap on AWS as cloud market surges

Growth accelerates from 19% to 21% quarter on quarter amid rocketing AI demand

Oxygen staff by Oxygen staff
19 November 2024
in Market data, News, Vendor
‘Our prediction is holding’ – Tackle.io CEO doubles down on $100bn cloud marketplace bet

Image by talha khalil from Pixabay

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Google and Microsoft stole share from market leader AWS in a surging Q3 global cloud infrastructure services market, according to Canalys.

Customer investment in hyperscalers’ AI offerings propelled year-on-year growth to 21% during the quarter, up from 19% in Q2, the analyst said.

Although AWS captured a 33% marketshare on the back of 19% growth, it was outshone by both Microsoft Azure and Google Cloud, who grew by 33% and 36%, respectively.

This chasing pair now hold 20% and 10% share, respectively.

AWS still outgrew its two smaller rivals in dollar terms, however, as it packed on an extra $4.4bn to its tally.

The leading hypercalers have over invested in next-generation AI infrastructure to ensure they can scale their offerings in line with the growing needs of AI customers, Canalys noted.

“Continued substantial expenditure will present new challenges, requiring cloud vendors to carefully balance their investments in AI with the cost discipline needed to fund these initiatives,” said Rachel Brindley, Senior Director at Canalys.

“While companies should invest sufficiently in AI to capitalize on technological growth, they must also exercise caution to avoid overspending or inefficient resource allocation. Ensuring the sustainability of these investments over time will be vital to maintaining long-term financial health and competitive advantage.” 

“On the other hand, the three leading cloud providers are also expediting the update and iteration of their AI foundational models, continuously expanding their associated product portfolios,” Yi Zhang, Analyst at Canalys added.

“As these AI foundational models mature, cloud providers are focused on leveraging their enhanced capabilities to empower a broader range of core products and services. By integrating these advanced models into their existing offerings, they aim to enhance functionality, improve performance and increase user engagement across their platforms, thereby unlocking new revenue streams.” 

Tags: AWSfeaturedGoogleMicrosoft
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