Cloud Market-Share Q4 2023 Results: AWS Falls As Microsoft Grows

Here are the cloud market-share results for fourth-quarter 2023 for the top five leaders—AWS, Alibaba, Google Cloud, Microsoft and Salesforce—as spending ballooned to $74 billion.

Amazon Web Services’ stronghold over the global cloud market is showing some vulnerability as AWS’ cloud market share dropped 2 points, while Microsoft’s cloud share increased by nearly 2 points year over year during fourth-quarter 2023.

Enterprise spending on cloud infrastructure services reached $73.7 billion in fourth-quarter 2023, representing a 20 percent increase compared with $61.6 billion in fourth-quarter 2022, according to new data from IT market research firm Synergy Research Group.

“This was a banner quarter for the cloud market,” said John Dinsdale, vice president and chief analyst for Synergy, in an email to CRN. “As the market continues to grow strongly, Amazon, Microsoft and Google still account for a large share of cloud spending—their combined share stood at 67 percent in Q4. Microsoft had reason to be very satisfied, as its market share increased by almost 2 full percentage points to reach a new high.”

[Related: Google Cloud’s $37B Run Rate, Record Profit And Gemini: 5 Google Earnings Takeaways]

Dinsdale said that Google’s share “moved higher while Amazon nudged down.”

“Amazon remains far ahead of Microsoft, but the gap is closing,” he said.

CRN takes a look at the top five cloud market-share leaders of fourth-quarter 2023, which included Alibaba, AWS, Google Cloud, Microsoft Azure and Salesforce.

Cloud Spending Hits $270 Billion In 2023; Record Q4 Thanks To AI

Before jumping into the exact market-share figures for Alibaba, Amazon, Google, Microsoft and Salesforce, it is key to know that Q4 2023 was an exceptionally strong quarter for cloud providers as demand from customers surged.

“The last quarter of the year usually benefits from a seasonal bounce with quarterly spending increasing much more than in the first three quarters, but this quarter set a record. Q4 spending jumped by $5.6 billion from the previous quarter, representing by far the biggest sequential increase the cloud market has ever achieved,” said Dinsdale.

In 2023, worldwide enterprise spending on cloud infrastructure services hit approximately $270 billion, an increase of 19 percent compared with 2022.

“While economic, currency and political headwinds have diminished somewhat, it is clear that generative AI technology and services have had a major impact, helping to further boost cloud spending,” Dinsdale said. “Generative AI is clearly one of the main reasons for the strong performance, as the technology is embraced by cloud providers and enterprises alike.”

Here are the top five worldwide cloud market-share leaders in fourth-quarter 2023.

No. 5: Salesforce

Market Share Q4 2023: 3%

Market Share Q4 2022: 3%

Market Share Q4 2021: 3%

Cloud and CRM superstar Salesforce ranked No. 5 in the global cloud market in the fourth quarter by winning 3 percent share.

The San Francisco-based company doubled down on new cloud offerings as well as partnerships with the big three—Google Cloud, Microsoft Azure and AWS—in 2023.

Salesforce’s global market share has remained at around the 3 percent mark for the past three years, according to data from Synergy Research Group.

It is key to note that in fourth-quarter 2023, Salesforce overtook IBM as the world’s No. 5 market-share player. IBM had been similarly hovering at around 3 percent market share for the past several quarters, but only captured 2 percent global cloud share during fourth-quarter 2023.

No. 4: Alibaba

Market Share Q4 2023: 4%

Market Share Q4 2022: 5%

Market Share Q4 2021: 6%

China’s largest and most dominant cloud company, Alibaba, won 4 percent share of the global cloud services market during fourth-quarter 2023.

Alibaba Cloud is the cloud computing arm of technology conglomerate Alibaba Group.

Although Alibaba ranks No. 4 in the worldwide cloud market, its share has been falling year after year. In fourth-quarter 2021, the company won 6 percent share of the global cloud market, then only 5 percent share one year later in fourth-quarter 2022. Alibaba’s share again dropped 1 point from fourth-quarter 2022 to fourth-quarter 2023.

In May 2023, Alibaba Group said it was going to spin off Alibaba Cloud, but it never happened. Six months later, Alibaba Group scraped the plan and said it would no longer spin off its cloud business due to uncertainties created by geopolitical issues, such as U.S. export curbs on AI chips.

No. 3: Google (Google Cloud)

Market Share Q4 2023: 11%

Market Share Q4 2022: 11%

Market Share Q4 2021: 10%

Google’s cloud business, Google Cloud, won 11 percent share of the global cloud services market in the fourth quarter.

Mountain View, Calif.-based Google Cloud entered the cloud computing market less than a decade ago. Following the hiring of Google Cloud CEO Thomas Kurian in 2018, the company has exploded over the past six years and cemented itself as the world’s third-largest cloud player.

Google Cloud currently has an annual run rate of $36.8 billion.

Google Cloud has been steadily increasing its market share over the years. Synergy’s Dinsdale said that although Google Cloud didn’t gain a full 1 point market share year over year in fourth-quarter 2023, the company’s “share moved higher,” likely close to hitting 12 percent market share.

No. 2: Microsoft

Market Share Q4 2023: 24%

Market Share Q4 2022: 23%

Market Share Q4 2021: 21%

Microsoft is continuing to narrow the gap between itself and AWS as the king of cloud computing.

The world’s largest software company won 24 percent share of the global cloud services market during fourth-quarter 2023. AWS’ market-share lead over No. 2 Microsoft has never been closer.

“Microsoft had reason to be very satisfied, as its market share increased by almost 2 full percentage points to reach a new high,” said Dinsdale.

The Redmond, Wash.-based company has grown its global cloud market share by nearly 3 points over just the past two years, with Microsoft owning just 21 percent share in fourth-quarter 2021.

Microsoft’s “intelligent cloud” segment—which includes Azure, SQL Server, Windows Server, Visual Studio, Nuance, GitHub, Microsoft Partner Network, and enterprise and partner services—generated $25.9 billion during fourth-quarter 2023 calendar year, up 19 percent year over year.

No. 1: Amazon (AWS)

Market Share Q4 2023: 31%

Market Share Q4 2022: 33%

Market Share Q4 2021: 33%

AWS remained the dominant global leader in cloud infrastructure services, winning 31 percent share of the worldwide market in fourth-quarter 2023. The Seattle-based company has been the world leader in cloud computing for well over a decade.

However, AWS’ 31 percent share in fourth-quarter 2023 represented a 2-point share decrease compared with fourth-quarter 2022 when it captured 33 percent market share.

“Amazon remains far ahead of Microsoft, but the gap is closing,” Synergy’s Dinsdale said.

In fourth-quarter 2021, AWS’ 33 percent market share was 12 points higher than Microsoft’s 21 percent share. Just two years later, AWS’ 31 percent share is just 7 points higher than Microsoft’s 24 percent share in fourth-quarter 2023.

AWS generated $24.2 billion in sales during fourth-quarter 2023 with the cloud giant now on a $97 billion annual run rate.

Other Top Cloud Market-Share Leaders

IBM Market Share Q4 2023: 2%

Oracle Market Share Q4 2023: 2%

Tencent Market Share Q4 2022: 2%

IBM, Oracle and China-based Tencent consistently battle to crack into the top five cloud market rankings. All three of these software and tech giants won around 2 percent share of the global cloud services market during fourth-quarter 2023.

Other companies that have a market share of 1 percent (to the nearest percentage point) include Baidu, China Telecom, China Unicom, Huawei, Fujitsu, NTT, Snowflake, SAP, Rackspace and VMware.

No tech company has come close to reaching the cloud size of the big three: Amazon, Microsoft and Google. Combined, these three cloud leaders won 67 percent of the global market in fourth-quarter 2023.