Big 3 Public Cloud Providers Continue to Dominate, Led by AWS (2023)

Inflationary pressures and the continued impact of the COVID-19 pandemic are not slowing down cloud adoption.

Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform — aka the Big 3 public cloud providers — all reported financial earnings this week, and all once again showed revenue and usage growth.

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Microsoft reported on April 26 that its third-quarter fiscal 2022 overall cloud revenue grew by 32%. Google's parent company Alphabet also reported on April 26 — its cloud revenue grew by 44% to $5.8 billion. Finally, Amazon reported on April 28, with cloud service sales up 37% year-over-year to $18.4 billion in the company's first quarter of its fiscal 2022.

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Microsoft Picks Up the Pace in the Cloud with Big Deals

For Microsoft a key driver of cloud growth is winning large deals.

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"The number of $100 million-plus Azure deals more than doubled year over year, and we are seeing consumption growth across every industry, customer segment, and geography," Microsoft CEO Satya Nadella said during his company's earnings call.

Nadella said that Microsoft is winning tier 1 infrastructure workloads from industries across multiple categories that are all moving mission-critical workloads to Azure.

"Overall, we are seeing larger, more strategic Azure commitments from industry leaders, including Boeing, Kraft Heinz, US Bank, and Westpac, who all chose our cloud to accelerate their digital transformations," Nadella said.

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Google Differentiating with Open Infrastructure

There are a number of things that differentiate Google Cloud from its rivals, according to Alphabet CEO Sundar Pichai.

"Our open, secure infrastructure remains a differentiator as it enables customers to run their workloads and apps where they need them," Pichai said. "This is winning global brands like Dun & Bradstreet, Boeing, and Kyocera."

Another differentiator, according to Pichai, is the Google Tau VM offering. Tau VMs provide cloud virtual machines that use AMD EPYC 7003 "Milan" processors, powering price/performance that's more than 40% better than any other leading cloud, he said.

Additionally, the Google Distributed Cloud Edge is also bringing in users as anew edge solution designed to run telecommunication networks at scale, Pichai said.

AWS Continues to Lead Public Cloud Providers as It Grows Footprint

AWS continues to lead the cloud market and is continuing to grow its footprint.

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In the last quarter, AWS completed the launch of its first 16 local zones in the United States, with 32 more to come across 26 countries, said Amazon CFO Brian Olsavsky.

"Local zones extend AWS regions to place our services at the edge of the cloud near large population, industry, and IT centers, expanding our infrastructure footprint and enabling customers to build with single-digit millisecond latency performance," Olsavsky said during his company’s earnings call.

Overall, according to Synergy Research Group, the cloud market is growing at a rate of 34% per year. Despite the fact that there are many public cloud providers around the world, the Big 3 — AWS, Microsoft, and Google — account for 65% of total revenues.

Synergy Research GroupBig 3 Public Cloud Providers Continue to Dominate, Led by AWS (1)

The Big 3 public cloud providers continue to hold the biggest market share.

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“While the level of competition remains high, the huge and rapidly growing cloud market continues to coalesce around Amazon, Microsoft, and Google,” said John Dinsdale, a chief analyst at Synergy Research Group.

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