Global Cloud Services Spending Hits $55.9 Billion in 1Q22

Worldwide cloud infrastructure services spending increased 34% to $55.9 billion in the first quarter of 2022, according to Canalys. The analytics company data estimates expenditure was over $2 billion more than in the previous quarter and $14 billion more than in 1Q21. The top three cloud service providers have benefited from increased adoption and scale, collectively growing 42% year on year and accounting for 62% of global customer spending.

Cloud-enabled business transformation has become a priority as organizations face global supply chain issues, cybersecurity threats, and geopolitical instability. Organizations of all sizes and vertical markets are turning to the cloud to ensure flexibility and resilience in the face of these challenges. SMBs, in particular, have driven investment in cloud infrastructure services to support workload migration, data storage services, and cloud-native application development.

At the same time, infrastructure hardware shortages and the threat of further price inflation have spurred many large enterprises to invest in large-scale, multi-year cloud contracts to lock in upfront discounts with the hyperscalers. All the major cloud providers have seen a significant increase in order backlogs as a result, which now totals several hundred billion dollars worldwide. This in turn is driving the importance of cloud marketplaces as a sales channel for third-party software and security, as businesses seek to burn down these cloud commitments, further fueling infrastructure consumption.

“Cloud has continued to be a hot market and transformation strategies are emphasizing digital resiliency to face the market challenges of today and tomorrow,“ said Canalys Research Analyst Blake Murray. “To be effective in resiliency planning, customers are turning to channel partners with the technical and consulting skills to help them effectively embrace hyperscaler cloud services.“

Top cloud partners are doubling down on certification efforts and skills recruitment around hyperscaler cloud services. Global systems integrators, including Accenture, Atos, Deloitte, HCL Technologies, TCS, Kyndryl, Tech Mahindra, and Wipro, are building practices with tens of thousands of cloud engineers and consultants. This has also included acquisitions of cloud application development and migration specialists, as well as the launch of new dedicated cloud services brands.

Amazon Web Services (AWS) was the leading cloud service provider in 1Q22, accounting for 33% of total spending after growing 37% on an annual basis. Microsoft Azure was second, growing by 46% to take a 21% market share. Google Cloud was the fastest growing of the top three, increasing by 54% in the latest quarter to account for 8% of the market.