Worldwide spending on cloud infrastructure-as-a-service resources passed the $100 billion mark in 2022 after growing 29.7% year-over-year, according to new Gartner Inc. data released today.

The research firm estimates that organizations rented $120.3 billion worth of cloud infrastructure in 2022, up from $92.8 billion the previous year. More than fourth-fifths of that spending went to the top five cloud providers. Those providers are Amazon Web Services Inc., Microsoft Corp., Alibaba Group Holding Ltd., Google LLC and Huawei Technologies Co. Ltd.

“IaaS growth in 2022 was stronger than expected, despite a slight softening in the fourth quarter as customers focused on using their previously committed capacity to its fullest potential,” said Gartner Vice President Sid Nag. “This is expected to continue until mid-2023 and is a natural outcome of the market’s maturity. We expect an acceleration in 2024, as there is still room for plenty of additional future growth.”

AWS continued to lead the IaaS segment by a wide margin in 2022. According to Gartner, $48.12 billion of the $120.3 billion that organizations spent on cloud infrastructure went to buying AWS resources. In percentage terms, the Amazon.com Inc. unit grew its market share to 40% last year from 38.1% at the end of 2021.

AWS launched multiple Amazon EC2 instances into general availability last year that may have contributed to its top line growth. Some of those instances run on the cloud giant’s homegrown Graviton3 processor series, while others are powered by Advanced Micro Devices Inc. silicon. AWS also rolled out on-demand cloud Macs for desktop application developers.

The Amazon unit’s EC2 portfolio is powered by a homegrown infrastructure platform called the AWS Nitro System. It includes, among other components, a custom hypervisor tasked with allocating processor and memory resources. At the hardware level, Nitro makes use of multiple accelerator cards that are each optimized to speed up a different set of computing tasks.

The second largest player in the IaaS market is Microsoft with its Azure platform. Azure captured 21.5% of worldwide IaaS spending last year, according to Gartner’s latest estimates, or about 0.9% more than in 2021. That translated into sales of $25.85 billion.

Alibaba ranked as the third largest market player with IaaS revenues of $9.28 billion. Google Cloud, in turn, reached fourth place after capturing a 7.5% slice of spending, which corresponded to about $9 billion. Huawei was the fifth-largest player in the worldwide IaaS market, with sales of $5.24 billion.

In terms of revenue growth, Google delivered the most impressive result. Gartner estimates that the search giant’s cloud business increased its IaaS sales by 45% in 2022. On a percentage basis, that made it the fastest-growing player among the market’s five largest IaaS providers.

Gartner cited Google’s increased focus on sales and marketing programs for partners as one contributor to its growth. Additionally, the research firm pointed to the company’s investments in the sovereign cloud market. Google’s sovereign cloud features enable customers to store sensitive records in the jurisdiction where they were generated, which is often necessary for regulatory compliance purposes.

The smaller providers that didn’t make it into Gartner’s top five ranking cumulatively accounted for 18.9% of the worldwide IaaS market. That’s down from 20% in 2021, suggesting the larger cloud providers are driving most of the spending growth. Overall, smaller IaaS providers generated $22.74 billion in revenue last year. 

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