Worldwide cloud infrastructure services spending increased 34% to US$55.9 billion in Q1 2022, as organisations prioritized digitalisation strategies to meet market challenges. The latest Canalys data estimates expenditure was over US$2 billion more than in the previous quarter and US$14 billion more than in Q1 2021.
The top three cloud service providers have benefited from increased adoption and scale, collectively growing 42% year on year and accounting for 62% of global customer spend.
Cloud-enabled business transformation has become a priority as organizations face global supply chain issues, cybersecurity threats and geopolitical instability. Organizations of all sizes and vertical markets are turning to cloud to ensure flexibility and resilience in the face of these challenges.
SMBs, in particular, have driven investment in cloud infrastructure services to support workload migration, data storage services and cloud-native application development. At the same time, infrastructure hardware shortages and the threat of further price inflation has spurred many large enterprises to invest in large-scale, multi-year cloud contracts to lock in upfront discounts with the hyperscalers.
All the major cloud providers have seen a significant increase in order backlogs as a result, which now total several hundred billion dollars worldwide. This in turn is driving the importance of cloud marketplaces as a sales channel for third-party software and security, as businesses seek to burn down these cloud commitments, further fuelling infrastructure consumption.
“Cloud has continued to be a hot market and transformation strategies are emphasising digital resiliency to face the market challenges of today and tomorrow,” said Canalys Research Analyst Blake Murray.
“To be effective in resiliency planning, customers are turning to channel partners with the technical and consulting skills to help them effectively embrace hyperscaler cloud services.”
Top cloud partners are doubling down on certification efforts and skills recruitment around hyperscaler cloud services. Global systems integrators, including Accenture, Atos, Deloitte, HCL Technologies, TCS, Kyndryl, Tech Mahindra and Wipro, are building practices with tens of thousands of cloud engineers and consultants.
This has also included acquisitions of cloud application development and migration specialists, as well as the launch of new dedicated cloud services brands. Smaller consultants, resellers, service providers and distributors are pursuing similar strategies as mid-market and SMB customers also demand support with cloud adoption.
As the use cases for cloud infrastructure services expand so does the potential complexity, and we see that hybrid and multi-cloud deployments are commonplace in the market,” said Canalys Research Analyst Yi Zhang.
“The hyperscalers are investing in rapid channel development and partners are responding as the opportunities grow.”