The company reported quarterly revenues of $27 billion from cloud services, which makes up more than half its total earnings for the third quarter
Microsoft beat Amazon Web Services (AWS), Salesforce and Google with its revenues from the public cloud ecosystem, says a new report. The company had reported quarterly revenues of $52.7 billion of which cloud services stood at $27 billion, representing more than half the total number for the October-December quarter.
The report from Synergy Research Group said public cloud service and infrastructure markets, including cloud operator and vendor revenues, totaled $544 billion in revenues last year. That represents 21% growth from 2021.
The future would shift to AI and cloud
Readers would recall that Microsoft CEO Satya Nadella had recently told earnings call participants that following their success with the cloud initiatives, the next focus area would be artificial intelligence. And true to his word, the company has announced multi-billion dollar investments into OpenAI.
On its part, Synergy holds the view that the focus on AI was to be expected as most companies are readying big investments on product development with revenue streams growing across the board in the coming years from these efforts. The layoffs initiated by the top-four providers of cloud infrastructure in recent months was also an indication of things to come.
According to the report, the largest segment of growth was infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS). Despite “major headwinds” like the strengthening U.S. dollar and issues in the Chinese market, IaaS and PaaS revenue jumped 29% to $195 billion in 2022.
Other significant market players outside of the top four include Adobe, Alibaba, Cisco, Dell, Digital Realty, Huawei, IBM, Inspur, Oracle, SAP, and VMware. These companies represented 60% of last year’s public cloud spend, says the report.
The report also went on to predict that the public would continue to rise and double over the next four years. Meanwhile, major cloud providers would also increase their amount of hyperscale data centers by 50% over this timeframe while data center network capacity would grow by more than65%.