The worldwide public cloud services market experienced a substantial surge in revenue, reaching a staggering $545.8 billion in 2022, reveals data from IDC Tracker. This shows an impressive growth rate of 22.9% compared to the previous year. Among the various categories, Software as a Service (SaaS) – Applications emerged as the primary revenue driver, contributing over 45% to the total revenue.
Infrastructure as a Service (IaaS) followed closely behind with 21.2% of the market share, while Platform as a Service (PaaS) and Software as a Service – System Infrastructure Software accounted for 17.0% and 16.7% respectively.
The foundational cloud services revenue grew by 28.8%, indicating that businesses worldwide are turning to cloud innovation platforms, harnessing the power of ubiquitous compute services, data/AI (artificial intelligence) services, and app framework services to revolutionize their operations. IDC predicts that spending on foundational cloud services, especially the dynamic duo of IaaS and PaaS, will outpace the general cloud market growth as companies eagerly embrace the digital revolution.
The SaaS – Applications segment reigns supreme and is projected to value over $547 billion by the end of 2023. Market conditions, along with increased spending on cloud solutions, are driving double-digit growth rates. The next wave of SaaS applications will leverage cutting-edge AI technology to deliver amazing improvements in personalization, customer experience, and operational efficiency.
Microsoft leads in public cloud revenue
The top five public cloud providers comprising Microsoft, Amazon Web Services, Salesforce Inc., Google, and Oracle captured a whopping 41% of the global market. Their combined revenue grew by an astonishing 27.3% year over year, with Microsoft leading the pack and holding a remarkable 16.8% market share in 2022. Amazon Web Services follows closely with a share of 13.5%.
Recently, Microsoft appointed Irina Ghose, the Chief Operating Officer, as the Managing Director of India. This decision comes after the resignation of Anant Maheshwari, the President of Microsoft India, who is seeking new opportunities. As the new Managing Director, Irina Ghose will take charge of engaging with various industries in India across Microsoft’s solution areas, with a special focus on leveraging artificial intelligence.
AI to drive cloud revenue
The widespread adoption of AI, driven by generative AI technology, has become a focal point for businesses’ strategic planning and long-term investments. Cloud providers play a crucial role in facilitating the evaluation and implementation of AI-enabled services. To support this, cloud providers are making substantial investments in high-performance infrastructure. This serves a dual purpose: unlocking the migration of enterprise applications from on-premises environments and laying the groundwork for rapid deployment of scalable AI software. These investments are creating new opportunities for market growth.
When developing strategies for PaaS developer and data services, organizations that are yet to begin their journey in developing AI-enabled applications are now prioritizing cloud providers that support these initiatives. On the other hand, organizations that have already embraced AI find themselves in a favorable position to evaluate the integration of generative AI capabilities into their intelligent application strategies.
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