The worldwide infrastructure as a service (IaaS) market grew 29.7% in 2022, to total $120.3 billion, up from $92.8 billion in 2021, according to Gartner. IaaS is, in turn, driving growth of software-as-a-service (SaaS) and platform-as-a-service (PaaS) as organisations continue to add more applications to the cloud and modernise existing ones.
► Plenty of room for growth with further acceleration expected next year
► Top four providers claim 80% market share
IaaS growth in 2022 was stronger than expected, despite a slight softening in the fourth quarter as customers focused on using their previously committed capacity to its fullest potential. That trend is expected to continue until mid-2023. This is a natural outcome of the market’s growing maturity, said Gartner. It expects an acceleration in 2024 and says there is still room for plenty of additional future growth.
In 2022, the top five IaaS providers accounted for over 80% of the market. Amazon continued to lead the worldwide IaaS segment with revenue of $48.1 billion and 40% market share. Microsoft followed with 21.5%, reaching over $25 billion in IaaS public cloud revenue in 2022. Alibaba Group was third with 7.7% although with modest 2.4% year over year growth. While Alibaba continued to lead the IaaS market in China, its limited potential for expansion across global markets has slowed growth, driving its recent decision to spin off its Alibaba Cloud business into a separate entity.
Google saw the highest growth rate of the top five IaaS vendors, growing 41% in 2022 to reach over $9 billion in revenue. Gartner said the firm’s increased investment in sovereign cloud and expanded sales and marketing partner programs helped to broaden its customer base and drive additional IaaS revenue.
Huawei rounded out the top five IaaS vendors with 4.4% market share and $5.2 billion in revenue for 2022. Since its 2020 pivot to an increased focus on cloud, Huawei has seen steadily growing IaaS revenue in China and emerging markets.
Gartner believes that generative AI will help to drive the cloud market forward, particularly as hyperscalers look to support offerings ‘beyond the existing, democratised generative AI solutions’. It asserts that new markets and opportunities for cloud hyperscalers will emerge related to sovereignty, ethics, privacy and sustainability.
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