Gartner: Global IaaS public cloud service revenue will grow 16.2% in 2023

According to Gartner, the global Infrastructure as a Service (IaaS) market will grow to $140 billion in 2023, up 16.2% from $120 billion in 2022. Amazon will continue to rank first in the IaaS market in 2023, followed by Microsoft, Google, Alibaba and Huawei.

“Cloud technology continues to be a key driver of business change, driven by hyperscale cloud providers’ desire to advance sovereignty, ethics, privacy and sustainability-related offerings, among other reasons,” said Sid Nag, research vice president at Gartner . “This should continue to drive exponential growth in the market going forward, with investments in generative artificial intelligence (GenAI) also boosting such offerings through 2024 and beyond.”

The top five IaaS providers account for 82% of the market share in 2023. Amazon continues to lead the global IaaS market with $54.6 billion in revenue and a 39% market share, followed by Microsoft with a 23% market share (see Table 1). Google grew 26.3% in 2023 and ranked third with a market share of 8.2%. Alibaba ranked fourth with a market share of 7.9%.

Table 1. Global IaaS public cloud service market share in 2022-2023 (Unit: million US dollars)

“As the top hyperscale cloud providers continue to grow their IaaS offerings in line with the GenAI trend, other areas such as software as a service (SaaS) and platform as a service (PaaS) should also grow,” Nag said. “All of these areas will rise with IaaS.”

GenAI has begun to have an impact on cloud market growth, but artificial intelligence (AI)-driven growth will be small through 2023.

“The cloud is the foundational and scalable infrastructure that is essential to enable GenAI,” said Nag . “Sectors that are beginning to be impacted by GenAI include IaaS (AI model training is consuming IaaS resources) and SaaS (GenAI capabilities are beginning to be included in SaaS applications). As a result, capacity requirements in the public cloud market are increasing rapidly, and this trend will continue through 2028. In the short term, AI-driven revenue growth will be small relative to the size of the entire public cloud market.”

Gartner clients can learn more in the “Worldwide Services Market Shares, 2023” and “Worldwide Infrastructure-as-a-Service Market Share Analysis, 2023.”