Cloud Spending Growth: Cloud Computing Is More Relevant Than Ever

Credit: LoboStudioHamburg

The three largest cloud computing companies in the world—Amazon, Google, and Microsoft—recently released their first-quarter results. Although Amazon and Google’s performance left a lot to be desired, the financial reports underscored the ever-growing demand for cloud computing. In a study published by Synergy Research Group, it was revealed that enterprise spending for the first quarter of 2022 is on course to reach $53 billion, registering a 34% increase year-over-year.

Despite recording a net loss in Q1 2022, Amazon maintains a commanding 33% share of the cloud computing market, followed by Microsoft—which gained a 2% share over the previous year—at 22%, and Google at 10%. It wasn’t only the big three that posted stellar numbers. In fact, all other cloud vendors posted a 150% growth in revenues since 2018, even though their collective market share tumbled from 48% to 36% this year.

End-user spending on public cloud services follows the same trend. It is projected to grow from $410.9 billion in 2021 to $494.7 billion in 2022, possibly reaching $600 billion by the end of 2023. Sectors of public cloud computing seen to emerge with the biggest growth are infrastructure-as-a-service (30.6%), desktop-as-a-service (26.6%), and platform-as-a-service (26.1%).

Moreover, the cloud management software market also registered huge growth. From a value of $11.34 billion in 2021, the market is expected to reach $14.6 billion in 2022, eventually achieving a valuation of $85.02 billion by 2029 with annual growth of 28.6%.

Given its long-term projections, cloud computing is far from reaching its ceiling. As such, investing in this space comes as a continuing prevailing trend for large enterprises.

Global Dilemmas Have Accelerated Growth

Interestingly, large companies haven’t been cutting back on their IT budgets amid disasters like inflation and the Ukraine-Russia war. After all, it’s another global disaster that spurred today’s astonishing cloud spending growth: COVID-19.

Paralyzing industries at first, the pandemic saw companies leverage cloud storage, cloud-based software, and cloud management solutions to circumvent proximity issues caused by the coronavirus and physical distancing measures. The pandemic gave rise to remote working models that required companies to connect with their workforce online, and the same went for schools and their learners. Cloud-based solutions filled that gap in spades given their ability to effectively simulate and improve on the experience of face-to-face work arrangements.

This has become the norm in the modern business landscape, even when much of the world has transitioned to a hybrid work arrangement. After all, many software solutions are designed to optimize, sometimes even automate, business processes. As a result, a lot of organizations have experienced a significant boost in performance, from sales and accounting to marketing to content management.

Amid today’s cloud spending growth, cloud computing has been flourishing in the face of current dilemmas, for better or worse. On the downside, cloud services have been weaponized by the Ukrainian and Russian forces as a cyber war takes place alongside its on-ground counterpart. On the upside, Microsoft CEO Sadya Nadella views digital technology as “a deflationary force in an inflationary economy.” Cloud-based solutions lead companies to improve their productivity, raise sales, and promote the affordability of products and services. And productivity gains happen to be an effective counter to inflation, according to Microsoft executive.

In any case, the only direction cloud computing is going right now and in the foreseeable future is upward.