Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Amazon Web Services' stronghold over the global cloud market is showing some vulnerability as AWS' cloud market share dropped two points, while Microsoft's cloud share increased by nearly two points year-over-year during fourth-quarter 2023.

Enterprise spending on cloud infrastructure services reached $73.7bn in fourth-quarter 2023, representing a 20 per cent increase compared with $61.6bn in fourth-quarter 2022, according to new data from IT market research firm Synergy Research Group.

"This was a banner quarter for the cloud market," said John Dinsdale, vice president and chief analyst for Synergy, in an email to CRN US. "As the market continues to grow strongly, Amazon, Microsoft and Google still account for a large share of cloud spending—their combined share stood at 67 per cent in Q4. Microsoft had reason to be very satisfied, as its market share increased by almost two full percentage points to reach a new high."

Dinsdale said that Google's share "moved higher while Amazon nudged down."

"Amazon remains far ahead of Microsoft, but the gap is closing," he said.

CRN US takes a look at the top five cloud market share leaders of Q4 2023, featuring Alibaba, AWS, Google Cloud, Microsoft Azure and Salesforce.

Cloud spending hits $270bn In 2023; record Q4 thanks to AI

Before jumping into the exact market share figures for Alibaba, Amazon, Google, Microsoft and Salesforce, it is key to know that Q4 2023 was an exceptionally strong quarter for cloud providers as demand from customers surged.

"The last quarter of the year usually benefits from a seasonal bounce with quarterly spending increasing much more than in the first three quarters, but this quarter set a record. Q4 spending jumped by $5.6bn from the previous quarter, representing by far the biggest sequential increase the cloud market has ever achieved," said Dinsdale.

In 2023, worldwide enterprise spending on cloud infrastructure services hit approximately $270bn, an increase of 19 per cent compared with 2022.

"While economic, currency and political headwinds have diminished somewhat, it is clear that generative AI technology and services have had a major impact, helping to further boost cloud spending," Dinsdale said. "Generative AI is clearly one of the main reasons for the strong performance, as the technology is embraced by cloud providers and enterprises alike."

Here are the top five worldwide cloud market-share leaders in fourth-quarter 2023.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

No. 5: Salesforce

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Market Share Q4 2023: Three per cent

Market Share Q4 2022: Three per cent

Market Share Q4 2021: Three per cent

Cloud and CRM superstar Salesforce ranked No. 5 in the global cloud market in the fourth quarter by winning three per cent share.

The San Francisco-based company doubled down on new cloud offerings as well as partnerships with the big three—Google Cloud, Microsoft Azure and AWS—in 2023.

Salesforce's global market share has remained at around the three per cent mark for the past three years, according to data from Synergy Research Group.

It is key to note that in fourth-quarter 2023, Salesforce overtook IBM as the world's No. 5 market-share player. IBM had been similarly hovering at around three per cent market share for the past several quarters, but only captured 2 percent global cloud share during fourth-quarter 2023.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

No. 4: Alibaba

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Market Share Q4 2023: Four per cent

Market Share Q4 2022: Five per cent

Market Share Q4 2021: Six per cent

China's largest and most dominant cloud company, Alibaba, won four per cent share of the global cloud services market during fourth-quarter 2023.

Alibaba Cloud is the cloud computing arm of technology conglomerate Alibaba Group.

Although Alibaba ranks No. 4 in the worldwide cloud market, its share has been falling year after year. In fourth-quarter 2021, the company won six per cent share of the global cloud market, then only 5 percent share one year later in fourth-quarter 2022. Alibaba's share again dropped one point from fourth-quarter 2022 to fourth-quarter 2023.

In May 2023, Alibaba Group said it was going to spin off Alibaba Cloud, but it never happened. Six months later, Alibaba Group scraped the plan and said it would no longer spin off its cloud business due to uncertainties created by geopolitical issues, such as US export curbs on AI chips.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

No. 3: Google (Google Cloud)

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Market Share Q4 2023: 11 per cent

Market Share Q4 2022: 11 per cent

Market Share Q4 2021: 10 per cent

Google's cloud business, Google Cloud, won 11 per cent share of the global cloud services market in the fourth quarter.

Mountain View, Calif.-based Google Cloud entered the cloud computing market less than a decade ago. Following the hiring of Google Cloud CEO Thomas Kurian in 2018, the company has exploded over the past six years and cemented itself as the world's third-largest cloud player.

Google Cloud currently has an annual run rate of $36.8bn.

Google Cloud has been steadily increasing its market share over the years. Synergy's Dinsdale said that although Google Cloud didn't gain a full one point market share year-over-year in fourth-quarter 2023, the company's "share moved higher," likely close to hitting 12 per cent market share.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

No. 2: Microsoft

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Market Share Q4 2023: 24 per cent

Market Share Q4 2022: 23 per cent

Market Share Q4 2021: 21 per cent

Microsoft is continuing to narrow the gap between itself and AWS as the king of cloud computing.

The world's largest software company won 24 per cent share of the global cloud services market during fourth-quarter 2023. AWS' market-share lead over No. 2 Microsoft has never been closer.

"Microsoft had reason to be very satisfied, as its market share increased by almost two full percentage points to reach a new high," said Dinsdale.

The Redmond, Wash.-based company has grown its global cloud market share by nearly three points over just the past two years, with Microsoft owning just 21 per cent share in fourth-quarter 2021.

Microsoft's "intelligent cloud" segment—which includes Azure, SQL Server, Windows Server, Visual Studio, Nuance, GitHub, Microsoft Partner Network, and enterprise and partner services—generated $25.9bn during fourth-quarter 2023 calendar year, up 19 per cent year-over-year.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

No. 1: Amazon (AWS)

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Market Share Q4 2023: 31 per cent

Market Share Q4 2022: 33 per cent

Market Share Q4 2021: 33 per cent

AWS remained the dominant global leader in cloud infrastructure services, winning 31 per cent share of the worldwide market in fourth-quarter 2023. The Seattle-based company has been the world leader in cloud computing for well over a decade.

However, AWS' 31 per cent share in fourth-quarter 2023 represented a two-point share decrease compared with fourth-quarter 2022 when it captured 33 per cent market share.

"Amazon remains far ahead of Microsoft, but the gap is closing," Synergy's Dinsdale said.

In fourth-quarter 2021, AWS' 33 per cent market share was 12 points higher than Microsoft's 21 per cent share. Just two years later, AWS' 31 per cent share is just seven points higher than Microsoft's 23 percent share in fourth-quarter 2023.

AWS generated $24.2bn in sales during fourth-quarter 2023 with the cloud giant now on a $97bn annual run rate.

Cloud market share Q4 2023 results: AWS falls as Microsoft grows

Here are the cloud market share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74bn

Other top cloud market share leaders

IBM Market Share Q4 2023: Two per cent

Oracle Market Share Q4 2023: Two per cent

Tencent Market Share Q4 2022: Two per cent

IBM, Oracle and China-based Tencent consistently battle to crack into the top five cloud market rankings. All three of these software and tech giants won around two per cent share of the global cloud services market during fourth-quarter 2023.

Other companies that have a market share of one per cent (to the nearest percentage point) include Baidu, China Telecom, China Unicom, Huawei, Fujitsu, NTT, Snowflake, SAP, Rackspace and VMware.

No tech company has come close to reaching the cloud size of the big three: Amazon, Microsoft and Google. Combined, these three cloud leaders won 67 per cent of the global market in fourth-quarter 2023.