Synergy: the cloud market reaches $270 billion in 2023 as AI revives growth

2024-02-01 · Publisher : Synergy Research Group · Domain : Cloud & DevOps

Synergy Research puts the cloud infrastructure market at $270 billion for 2023 and close to $74 billion for Q4 alone, up 20%. Generative AI helps explain the rebound, and Microsoft gains share against Amazon.

### Background On 1 February 2024, Synergy Research Group publishes its fourth-quarter 2023 figures. Enterprise spending on cloud infrastructure services reaches close to $74 billion ($73.7 billion) for the quarter, up 20% year on year. The market grows by $5.6 billion compared with the third quarter, which Synergy describes as the largest quarter-on-quarter increase ever recorded. For the full year 2023 the market is worth $270 billion, up 19% on 2022. ### Key facts - Worldwide market shares in Q4: Amazon 31% (down), Microsoft 24%, Google 11%. The top three together hold 67% of the market. - Microsoft gains almost two points of share compared with Q4 2022; Google's share also rises. - Public cloud services (IaaS and PaaS) grow 21% in Q4, and the three leaders account for 73% of them. - Among second-tier providers, the strongest growth comes from Huawei, China Telecom, Snowflake, MongoDB, Oracle and VMware. - Synergy estimates that generative AI helped revive spending after several quarters of slowdown. ### Why it matters For a CIO, this is the first numerical sign of a turnaround: after a cost-optimization cycle in 2022-2023, cloud budgets are rising again, and AI is one of the drivers. The market remains highly concentrated, but the split is changing: Microsoft and Google are nibbling at the leader's share. Multi-cloud choices and consumption commitments are therefore negotiated in an accelerating market. ### Takeaway At the end of 2023 the cloud leaves its slowdown phase: $270 billion for the year, with generative AI as a new driver.

Tags : Cloud, Hyperscaler, IA, AWS, Azure