Organizations Spent More Than $55 Billion on Cloud Infrastructure Services in Q1

By Laura Stotler, TMCnet Contributing Editor  |  May 06, 2022

The volatile global economy hasn't slowed spending on cloud infrastructure services According to a new report, organizations increased their cloud spending by 34 percent in the first quarter of 2022, shelling out $55.9 billion on services to support digital transformation strategies, meet global market challenges, and optimize their workflows and operations.

New data from Canalys estimates that cloud services spending rose by more than $2 billion over the previous quarter, and by $14 billion over the first quarter of 2021. The increased spending has greatly benefited the top three cloud service providers, who have grown 42 percent year and year and make up 62 percent of global customer spending for cloud infrastructure services.

“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 Blake Murray, analyst at Canalys Research. “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.”

Some of the challenges of the last couple of years, including cybersecurity threats, geopolitical turmoil and global supply chain issues, have only accelerated cloud-enabled business transformation. More organizations, particularly SMBs, have increased their investments in cloud services to support a host of business initiatives. Hardware shortages and looming price increases have also pushed businesses to lock into large-scale, multi-year cloud contracts that include discounts and price stability.

Canalys found that AWS remained the leading cloud service provider for Q1 this year, making up 33 percent of total spending. Amazon also continued to expand globally with the launch of 16 local zones in the U.S. and plans for 32 additional local zones across 26 countries.

Microsoft (News - Alert) Azure came in second during that time period, with 21 percent market share. Microsoft succeeded in doubling the number of Azure contracts by more than $100 million over Q1 of 2021. Google (News - Alert) Cloud rounded out the top three cloud infrastructure providers, making up eight percent of the market. Google Cloud was the fastest growing of the top three providers, with a 54 percent increase over the previous year. Google has been focused on AI, analytics, cybersecurity and digital sovereignty, which have helped grow its global reach.

“As the use cases for cloud infrastructure services expand so does the potential complexity, and we see that hybrid and multi-cloud deployments are commonplace in the market,” said Yi Zhang, analyst at Canalys Research. “The hyperscalers are investing in rapid channel development and partners are responding as the opportunities grow.”

Edited by Erik Linask
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