Second quarter of the year saw significant growth in the global market for cloud infrastructure services. The growth rate, however, didn’t match its first quarter counterpart. Analysts are attributing this to potential customers’ current spending habits. Despite this, these numbers are met with optimism, especially with artificial intelligence (AI) on the brink of making a meaningful impact on revenue.
Data reported by Canalys reveals that worldwide cloud infrastructure services spending rose by 16% to US$72.4 billion in Q2. Although lower than Q1’s 19% growth, it’s viewed positively in a market that continues to expand.
When it comes to market shares, the big three in cloud vendors — Amazon Web Services (AWS), Microsoft Azure, and Google Cloud — make up nearly two-thirds. Their contribution in Q2 made up 65% of total spending but their collective 20% growth rate saw a minor decline from the previous quarter.
AI represents the new frontier for cloud services. Although the commercialisation of AI technologies into existing cloud products hasn’t yet seen major uptake, the prediction is that this will change in the not-so-distant future. AI is expected to drive significant investments in cloud technology; in fact, the major cloud providers are already pouring resources into AI.
AWS and Microsoft in particular launched AI-oriented partner programmes this quarter. AWS, which leads the overall cloud infrastructure services market with a 30% share, shows proactive investment in AI. As evidence of this activity, Canalys points to the $100 million AWS has committed to a new generative AI programme.
On the other hand, Microsoft, with a 26% share in the market, has gained several high-profile clients for its Azure OpenAI Service. With expected AI demand increases, it has introduced the Microsoft AI Cloud Partner Program.
In third place, Google Cloud takes up 9% of the market but its growth rate is stronger compared to the top two.
As cloud providers strive to increase the use of their AI products, the role of partners becomes crucial. Alex Smith, VP at Canalys, emphasized the importance of such alliances. He advised, “Vendors need to … focus on partners that are building service practices around AI, engage in sales and marketing initiatives that focus on AI, produce original thought leadership and compelling case studies around AI applications, and sell solutions that are embedded with AI capabilities.” According to Smith, these partners will guide companies toward becoming leaders in the AI field.
