The worldwide infrastructure as a service (IaaS) market grew 16.2% in 2023, to total $140 billion, up from $120 billion in 2022, according to Gartner, Inc. Amazon retained the No. 1 position in the IaaS market in 2023, followed by Microsoft, Google, Alibaba and Huawei.
In 2023, the top five IaaS providers accounted for 82% of the market. Amazon continued to lead the worldwide IaaS market with revenue of $54.6 billion and 39% market share , followed by Microsoft with 23% market share (see Table 1). With growth of 26.3% in 2023, Google moved into the third position at 8.2% market share. Alibaba secured the fourth spot with 7.9% of the market.
“As the top hyperscalers continue to grow their IaaS offerings in the shadow of GenAI, we should also see other areas, such as software-as-a-service (SaaS) and platform-as-a-service (PaaS), grow as well. IaaS is the tide that lifts all boats,” said Nag.
GenAI is beginning to have an impact on the growth of cloud markets, although AI-driven growth in 2023 was small.
“Cloud is the foundational and scalable substrate required to make GenAI a reality. The segments that are beginning to see the impacts of GenAI include IaaS, where AI model training is consuming IaaS resources, and SaaS where GenAI capabilities are beginning to be included in SaaS applications,” said Nag. “Capacity demand in public cloud markets has already increased sharply as a result and will continue to do so through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market.”
