UPDATED 16:38 EDT / JULY 13 2022


Enterprise tech spending growth remains strong, while Fortune 500 dials back spending

With the world still grappling with a post-pandemic economy, not to mention the several geopolitical issues plaguing global resource supply, it’s a surprise that the overall outlook for the enterprise tech space is overwhelmingly positive.

There are, however, a few interesting findings and caveats worth exploring, according to Erik Bradley (pictured), chief strategist of Enterprise Technology Research.

“We originally had about an 8.5% increase in budgets; that’s cooled down is 6.5% now,” he said. “But I’ll say with the doom and gloom and the headlines that we’re seeing every day, 6.5% growth coming off what we just did the last couple of years is still pretty fantastic as a backdrop.”

Bradley spoke with theCUBE industry analysts John Furrier and Dave Vellante at the AWS Summit New York event, during an exclusive broadcast on theCUBE, SiliconANGLE Media’s livestreaming studio. They discussed the macro and vendor-specific data around enterprise tech, including spending and market share trends, as well as assessed Amazon Web Services, Microsoft Azure and Google Cloud Platform. (* Disclosure below.)

Larger names pumping the brakes

ETR’s latest survey comprehensively analyzed the industry outlook from macro and vendor-specific viewpoints. Peculiarly, the macro data shows a slowing down in terms of Fortune 500 tech spending. This downturn, however, might be incidental rather than indicative of any impending doom.

“The biggest drop in spending that we captured is Fortune 500, which is surprising. But at the same time, these companies have a better purview into the economy in general,” Bradley explained. “They tend to see things further in advance. And we often fail to remember they spend a lot of money, so they don’t need to play catch-up.”

What is truly noteworthy, though, is that AWS seems to have borne a bit more of that decrease.

“When we get into the AWS data, the Fortune 500 decrease seems to be hitting them a little bit more than it is Azure and GCP,” Bradley added.

While there are a few kinks in AWS’ longstanding armor, the company still remains king in several areas, including true cloud compute and infrastructure as a service, according to Bradley.

When it comes to a technology-wise analysis of spending, container spend is the only exemption to the decrease. The numbers show data warehousing, data analytics and machine learning/artificial intelligence have, especially, experienced headwinds.

AWS vs. Azure vs. GCP: analyses and projections

With Azure, for instance, going from a net score hovering around 80% previously to around 60% last quarter, it’s clear that a flattening of the curve in relation to customer spend is inevitable as adoption gradually peaks and gains become marginal, according to Bradley. With AWS’ drop, however, there might be some concerns.

“Snowflake also was in the stratosphere, and that cooled off a little bit, but still very strong. And AWS is coming down,” Bradley said. “I think the reason why it’s so concerning is that, firstly, it’s within the Fortune 500, and also their rate of decline is more than Azure right now.”

The story tends to be the same when analyzing legacy data warehouse products between the three companies. “When we look at our survey takers that have them and analyze where their spend is going, that spend is going to Snowflake first, and then it’s going to Google, and then it’s going to Microsoft Azure and, and AWS is actually declining in there,” Bradley concluded.

Here’s the complete video interview, part of SiliconANGLE’s and theCUBE’s coverage of the AWS Summit New York event:

(* Disclosure: This is an unsponsored editorial segment. However, theCUBE is a paid media partner for the AWS Summit New York event. Amazon Web Services Inc. and other sponsors of theCUBE’s event coverage have no editorial control over content on theCUBE or SiliconANGLE.)

Photo: SiliconANGLE

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