{"id":99520,"date":"2023-07-31T07:39:00","date_gmt":"2023-07-31T06:39:00","guid":{"rendered":"https:\/\/www.cloudcomputing-news.net\/?p=99520"},"modified":"2025-04-23T08:57:38","modified_gmt":"2025-04-23T07:57:38","slug":"the-everlasting-iaas-evolution-100bn-revenues-and-networking-maturation","status":"publish","type":"post","link":"https:\/\/www.cloudcomputing-news.net\/news\/the-everlasting-iaas-evolution-100bn-revenues-and-networking-maturation\/","title":{"rendered":"The everlasting IaaS evolution: $100bn revenues and networking maturation"},"content":{"rendered":"\n

The tech media has spent years arguing whether innovation and market size within infrastructure as a service (IaaS) has finally topped out \u2013 but the most recent figures show there is still some way to go yet.<\/p>\n\n\n\n

2022 saw the worldwide IaaS market grew by almost 30% (29.7%) to total $120.3 billion (\u00a393.6bn) in revenue, according to figures totted up by Gartner. Amazon maintained the number one spot, with Microsoft as runner up. Alibaba retains third place ahead of Google \u2013 though at 7.7% and 7.5% market share respectively, it is a negligible lead \u2013 with Huawei in fifth position. The top five vendors accounted for more than 80% of the market, Gartner added.<\/p>\n\n\n\n

Within this are interesting examples of evolution in themselves. Google Cloud filed the most profitable quarter in the company\u2019s history<\/a> earlier this month, with an operating income of $395m during Q2 2023. This compared with a loss of $590m this time last year. Microsoft, meanwhile, posted an all-time best net income of $20.1bn. Yet the company stalled with regard to Azure<\/a> \u2013 whose figure is allocated across several buckets rather than being entirely disclosed \u2013 which grew only 26%, compared with 27% the previous quarter.<\/p>\n\n\n\n

The narrative driving these figures is, of course, AI. Microsoft CEO Satya Nadella, and Alphabet CEO Sundar Pichai outlined their thought process where the cloud infrastructure and AI markets are converging in their earnings calls.  <\/p>\n\n\n\n

\u201cAzure\u2026 the way I think about is we still are [at] inning two or three of even cloud migration, especially when you view is whether by industry moves to the cloud, segment move\u2026 as well as country adoption of the cloud,\u201d said Nadella. \u201cThere\u2019s still early innings of the cloud migration itself, there\u2019s a lot there still \u2013 and then on top of that, there is this completely new world of AI driving a new set of workloads.\u201d<\/p>\n\n\n\n

\u201cWhen I think about it long-term, I view the AI opportunity as expanding our total addressable market and allows us to win new customers,\u201d Pichai told analysts. \u201cThe scale of investments that we can directly bring into [Google] Cloud now \u2013 we have over 80 models across Vertex [AI], Enterprise, Search and Conversational AI, and we are taking all of them, translating it into deep industry solutions.\u201d<\/p>\n\n\n\n

For the hyperscale cloud providers, AI has long been a service to provide on top of the infrastructure. Gartner has seen this play out for some time, having added platform as a service (PaaS)<\/a> to its IaaS Magic Quadrant in 2020, recognising expanded enterprise use cases. \u201cIaaS is driving software as a service and platform as a service growth as buyers continue to add more applications to the cloud and modernise existing ones,\u201d said Sid Nag, VP analyst at Gartner.<\/p>\n\n\n\n

Nag added that the maturity of the IaaS market has led to a \u2018slight softening\u2019 from the end of 2022, as companies use their allocated capacity, but another acceleration should come in 2024.<\/p>\n\n\n\n

\u201cGenerative AI will continue to drive the cloud market forward, particularly as hyperscalers look to support offerings beyond the existing, democratised generative AI solutions,\u201d said Nag. \u201cAs enterprises integrate generative AI into their technology portfolio, new markets and opportunities for cloud hyperscalers will emerge related to sovereignty, ethics, privacy, and sustainability.\u201d<\/p>\n\n\n\n

Meanwhile, IDC has posited that worldwide revenue for what the analyst describes as IaaS cloud networking services will reach almost $20bn ($19.4bn) this year, with a compound annual growth rate (CAGR) of 27.9% from 2022 to 2026.<\/p>\n\n\n\n

IDC defines this space as \u2018public cloud-based IaaS network services in which all the network infrastructure and services are elastic and on-demand.\u2019 The primary example of such networking technology is cloud connects and interconnects \u2013 in other words, either providing a dedicated network to connect to the cloud versus linking multiple connections to enable data exchange \u2013 while other examples include cloud WANs, IaaS service meshes, and VPNs to IaaS clouds.<\/p>\n\n\n\n

Again, this is an area where the hyperscalers are wielding significant leverage and investment. IDC noted that the top five public cloud IaaS vendors \u2013 the analyst puts Google ahead of Alibaba and swaps Tencent in for Huawei \u2013 were also the leaders in the IaaS cloud networking market. Organisations\u2019 hybrid and multi-cloud strategies are helping to define this market.<\/p>\n\n\n\n

\u201cCloud connects\/interconnects are foundational to every cloud strategy as these make it possible for enterprises to quickly and securely connect their on-premises and edge environments to IaaS providers,\u201d said Rohit Metra, IDC group vice president, network and telecommunications. \u201cThe rise of multi-cloud and SaaS applications that meet the demands of the modern distributed workforce in enterprises is the driver of rapid growth in cloud WANs and other IaaS network services.\u201d<\/p>\n\n\n\n

So if you are thinking there is little left to uncover in the IaaS market \u2013 it may be time to think again.<\/p>\n\n\n\n

Photo by zhang kaiyv<\/em><\/a><\/p>\n\n\n\n

Want to learn more about cybersecurity and the cloud from industry leaders? Check out Cyber Security & Cloud Expo<\/a> taking place in Amsterdam, California, and London. Explore other upcoming enterprise technology events and webinars powered by TechForge here<\/a>.<\/em><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

The tech media has spent years arguing whether innovation and market size within infrastructure as a service (IaaS) has finally topped out \u2013 but the most recent figures show there is still some way to go yet. 2022 saw the worldwide IaaS market grew by almost 30% (29.7%) to total $120.3 billion (\u00a393.6bn) in revenue, […]<\/p>\n","protected":false},"author":399,"featured_media":99521,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[495,69,30,38,48],"tags":[202,232],"ppma_author":[891],"class_list":["post-99520","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cloud-computing-applications","category-cloud-computing-google-cloud","category-cloud-computing-infrastructure","category-cloud-computing-infrastructure-service","category-cloud-computing-microsoft","tag-azure","tag-microsoft"],"acf":[],"yoast_head":"\nThe everlasting IaaS 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