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Canalys: Global Q4 cloud services spend tops $50bn

Fourth quarter of 2021 saw records broken as customers continued to shift more of their operations to the cloud

The cloud infrastructure services market ended 2021 strongly, breaking through the $50bn revenue barrier for the first time globally, as customers continued to migrate to hosted environments.

Market analysis from Canalys found that worldwide total spending on cloud services grew by 34% to $53.5bn, an increase of $13.6bn from the same period a year ago.

Spending was strong in the public sector and healthcare, but the channel was able to tap into widespread demand for cloud services from customers making more digital transformation moves.

Hybrid working is also having an impact on the market dynamics, with remote learning, gaming and streaming adding to the mix of factors underlying the surge in demand.

For 2021 as a whole, total cloud infrastructure services spending grew by 35% to $191.7bn, increasing from $142.0bn a year earlier. The movement of the world back to a more normal footing after Covid and increasing customer confidence led to a willingness by more to strike multi-year contracts with cloud providers.

Canalys highlighted the emergence of the “metaverse” as another reason why cloud service providers will be kept busy going forward, making sure they can deliver the infrastructure needed to cope with the demands of augmented and virtual reality.

“Continued investment in the metaverse by developers will result in a massive opportunity for cloud service providers, especially the hyperscalers,” said Canalys VP Alex Smith. “Building trust with customers and key technology partners will drive competitive positioning for metaverse development, while global infrastructure, edge deployments and 5G connectivity will be necessary for widespread low-latency experiences.”

All the leading names in the market – AWS, Microsoft Azure and Google Cloud – are looking to channel partners to help grow the enterprise side of the market and their ambitions for growth will continue to generate opportunities.

In the fourth quarter, AWS saw global growth of 40% annually, giving the cloud giant a 33% share of the market. The vendor has continued to seal major contract wins with large customers to keep it ahead of the field.

Microsoft Azure has a 22% market share but the vendor has the advantage of being able to lean on one of the biggest channel partner networks in the industry.

The third slot on the rankings was taken by Google Cloud, which grew by 63% but still commanded only 9% of the market. Canalys noted that the firm’s fortunes could change based on its strategy of backing startups and investing heavily in Africa.

There are already other research sources indicating that 2022 will be a year when enterprises continue to reach out to the channel to help them consume more cloud services.

According to an Enterprise Strategy Group survey of users across the US, Western Europe and Asia-Pacific, more than half identified cloud architectures as an area they faced problems with skills and could reach out to channel partners to plug those gaps.

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