Assimilated by everyday speech, “the cloud” –understood as a metaphor for computing on remote computers– has become the main growth factor in the information technology market. For more than a decade, this modality of services has expanded and will continue to grow, hardly affected by the macro evolution of the economy. According to the consultancy Canalys, the infrastructure as a service market grew globally by 29% in 2022, to 247 billion dollars in turnover. It is expected to end the current year with 23% growth and cross the line of 300,000 million.
No other IT segment matches this pace, which is up to seven times faster than the industry as a whole. Right now, lavish spending has given way to a more conservative approach to IT budget review. Another consultancy, Synergy, believes that "when economies improve and foreign exchange markets stabilize, growth will return to its trend." For its part, IDC –with other criteria– forecasts for the cloud in Europe revenues of 148,000 million in Europe in 2023 and an average increase of 22% per year until 2026.
The dominance of the global market by three cloud service providers is evident: Amazon Web Services (AWS), Microsoft and Google. They add up to three out of every four dollars billed and have the characteristic that they earn a very good living with other activities, which gives them unmatched financial capacity. Google Cloud is the only one of the three that loses money, the others are very profitable.
The trio's dominance is so strong that it has forced the rest of the industry, from hardware makers to telecom carriers to enterprise software, to align themselves with them to stay on top of the new mantra, the "hybrid cloud," nor in the next one, edge computing that will move computing to the edge of the networks, closer to the users.
It's not easy to compare the results of these cloud leaders. Its offer is not homogeneous nor are the figures presented in the same way. AWS declares revenues of 80,096 million, which represents 15.6% of Amazon and a growth of 20% over 2021. Microsoft surpasses it in appearance, but it includes other services in the account: its Intelligent Cloud billed 81,783 million in 2022, a 40.1% increase. The third competitor, Google Cloud, has doubled its turnover in two years and the losses do not deter it from continuing in the fight. Even growing by 37%, it entered 26,250 million – a third of its rivals – and had 2,960 million losses. With the good fortune that his income equals only 9.3% of the Alphabet empire.
A circumstance that protects the expansion of the business of these three is the number of geographical regions that they have been enabling outside their country. Where they do not do it alone, they tend to rely on local partners, such as Telefónica in Spain.
At a distance from the trio, his pursuers are two American companies, IBM and Oracle. A specialized branch of China's Alibaba would occupy fifth or sixth place in the global table, depending on which source is consulted. Although, to be honest, it has little impact in the United States and Europe.
Conversely, the upcoming battle will be fought in the Southeast Asian markets, with the right to great growth expectations. Geographical proximity gives advantages to four Chinese providers – Alibaba, Huawei, Baidu and Tencent – for whom the cloud business complements their core businesses and makes it easier for them to cut their margins by making things difficult for Western giants.
