The worldwide Infrastructure as a Service (IaaS) market experienced significant growth in 2022.
According to a report released by Gartner, the overall market grew by 29.7%, reaching a total value of $120.3 billion compared to $92.8 billion in 2021. Amazon remained the dominant player, holding the top position with a 40% market share, followed by Microsoft, Alibaba, Google, and Huawei.
The growth of IaaS has transformed the cloud from a mere technological disruptor to a major driver of business disruption. IaaS played a pivotal role in propelling the growth of Software-as-a-Service (SaaS) and Platform-as-a-Service (PaaS), as more buyers adopted cloud solutions and modernized their existing applications.
Despite a slight slowdown in the fourth quarter of 2022 due to customers optimizing their previously committed capacity, IaaS growth surpassed expectations. This trend is expected to continue until mid-2023, according to the study’s authors, with a significant acceleration expected in 2024.
IaaS Growth: Additional Commentary
Sid Nag, VP Analyst, Gartner, commented:
“Cloud has been elevated from a technology disruptor to a business disruptor. IaaS is driving software-as-a-service (SaaS) and platform-as-a-service (PaaS) growth as buyers to continue to add more applications to the cloud and modernize existing ones.
“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 potentialThis 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.”
The Big Five
The top five IaaS providers collectively accounted for over 80% of the market in 2022. Amazon maintained its leadership with a revenue of $48.1 billion, while Microsoft secured the second spot with a 21.5% market share and revenue exceeding $25 billion. Alibaba Group ranked third, with 7.7% market share, but faced limited growth potential in global markets, leading to its decision to spin off its Alibaba Cloud business.
Google saw the highest growth rate among the top five vendors, experiencing a 41% increase in revenue, amounting to over $9 billion.
Looking ahead, generative AI is anticipated to be a driving force in the cloud market. As hyperscalers adopt generative AI solutions, new markets and opportunities related to sovereignty, ethics, privacy, and sustainability are expected to emerge.
