Synergy Research Group, now part of TechInsights, announced that Q2 enterprise spending on cloud infrastructure services jumped by more than $43 billion from the second quarter of last year to reach $143 billion
The year-on-year growth rate increased for the 11th successive quarter, reaching 43%, the highest in the last eight years. Over those last 11 quarters, the market has doubled in size. GenAI has been the primary driver of that accelerated market growth, having been launched just before growth rates began to increase.
Among the major cloud providers, Amazon maintains a strong lead in the market, though Microsoft and Google continue to achieve substantially higher growth rates. Q2’s worldwide market share was 28%, 20%, and 15%, respectively. Among the tier two cloud providers, those with the highest growth rates include CoreWeave, OpenAI, Oracle, Crusoe, Nebius, Anthropic and Nscale. Based on cloud infrastructure service revenues, nine neocloud companies are now among the top 40 cloud providers.
“The accelerated cloud growth rate over the last three years, and in particular over the last four quarters, has been quite remarkable,” said John Dinsdale, Chief Analyst at Synergy Research Group. “AI technology has lit a fire under the cloud market and is now driving unprecedented growth. GenAI-specific cloud services are growing at 165% year over year, but equally importantly, AI technology is enabling enhanced functionality and increased growth across a much broader range of cloud services. It is also interesting to note that in the last two quarters, the U.S. share of the worldwide market has increased, reflecting the huge buildout of U.S. infrastructure by both hyperscale cloud operators and neoclouds.”
With most major cloud providers having released their earnings data for Q2, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were $143.4 billion, with trailing twelve-month revenues reaching $500 billion. Public IaaS and PaaS services account for the bulk of this market, and those grew by 47% in Q2. The leadership of the major cloud providers is even more pronounced in public cloud, where the top three account for 67% of the market.
Geographically, the cloud market continues to grow strongly in all regions of the world. When measured in local currencies, the major countries with the strongest growth included India, Indonesia, Ireland, Thailand, and Malaysia, all growing at rates well above the worldwide average. The U.S. remains the largest cloud market by a wide margin, with its scale far surpassing that of the entire APAC region. The U.S. market grew by 49% in Q2, which was well above the worldwide average. In Europe, the largest cloud markets are the U.K. and Germany, but the fastest-growing markets were Ireland, Norway, Denmark, and Finland.
Above, photo by Growtika on unsplash
