As growth in software and traditional tech is getting slowed in the recent years, cloud market is showing a dramatic change in the way firms were running applications and storing data.
The biggest firms in the cloud computing market issued clear warnings in the last two weeks that they are have started experiencing the cooling period in the cloud market which was booming since five years ago and especially during the time of pandemic.
The historical high inflation in the major economies and consistent increase in the interest rates by the central banks of the many nations causing businesses to reduce their spending and find ways to get more out of their current cloud infrastructure.
The three leaders in the cloud market Amazon, Microsoft and Alphabet, all have reported decline in their respective cloud businesses. Recently released revenues for the fourth quarter of these companies indicate that they have grown at slower pace than it was anticipated by analysts.
Alphabet’s chief financial officer, Ruth Porat said, “In Q4, we saw slower growth of consumption as customers optimized GCP cost, reflecting the macro backdrop.”
The revenue growth of Google Cloud was 32% in the fourth quarter in comparison to 38% in the third quarter of 2022. The revenue growth of Amazon Web Services was 20% in the fourth quarter in comparison to 27% in the third quarter of 2022. For AWS, it is a huge decline since 2018, as it was growing at 45% in 2018.