Worldwide cloud infrastructure services expenditure increased 28% year-on-year to reach $63.1 billion in Q3 2022, up $13.8 billion on the same period a year ago, according to analyst house Canalys.
But, with the negative impact of inflation and rising energy prices, companies are responding to market uncertainty by reducing spending, said the analyst, which may hit demand for cloud services in the “short term”.
Coupled with the strong US dollar, the total annual growth rate fell below 30% for the first time.
Amazon Web Services (AWS), Microsoft Azure and Google Cloud remained the top three providers in Q3 2022, together accounting for 63% of global spend, after growing 33%.
Most top cloud vendors missed revenue targets in the quarter, Canalys pointed out.
“Under economic pressure, enterprise customers are choosing to reduce operational risks by lowering their IT budgets,” said Canalys VP Alex Smith. “Despite winning large deals and having a backlog of contracts to fulfil, the growth of cloud vendors will be constrained because of inevitable project delays as some customers get skittish about the economic outlook.”
He warned: “Hyperscalers will face a period of rising costs and lower revenue growth, which may lead to more conservative planning in 2023. We predict the hyperscalers will need to increase their prices in Europe by 30% to account for rising energy costs.”
