The cloud infrastructure sector experienced continued strong expansion during the last quarter, as the ongoing pandemic prompted an increasing number of businesses to adopt cloud solutions due to widespread office closures. Recent financial reports from the leading three providers – Amazon, Microsoft, and Google – confirmed positive performance, with Synergy Research indicating a 33% increase in revenue compared to the same period last year, reaching nearly $33 billion for the quarter.

John Dinsdale, principal analyst at Synergy, expressed some surprise at the sustained level of growth. “We anticipated robust expansion within the market, but the magnitude of growth observed in the third quarter was somewhat unexpected,” he stated.

He further explained, “Overall revenues increased by $2.5 billion from the preceding quarter, resulting in a slight upward trend in the year-over-year growth rate, which is atypical for a market of this size. It’s evident that COVID-19 has provided an additional impetus to a market that was already experiencing rapid development.”

As has become customary, Amazon generated the highest revenue at $11.6 billion, an increase from $10.8 billion in the previous quarter. This represents a 29% year-over-year rise. While Amazon’s growth rate within the cloud market is showing some deceleration, its substantial market share – currently around 33%, a figure that has remained relatively stable – means that its overall revenue generation, nearly double that of its nearest competitor Microsoft, remains significant.

Microsoft’s Azure revenue increased by 48% year over year, also demonstrating a slight slowdown, but still securing a strong second position with an 18% market share. Based on Synergy’s total quarterly figure of $33 billion, Microsoft’s revenue for the quarter totaled $5.9 billion, up from $5.2 billion last quarter.

Google reported cloud revenue of $3.4 billion, encompassing all cloud-related revenue including G Suite and other software offerings. Synergy calculated this as representing 9%, or $2.98 billion, up from $2.7 billion in the previous quarter, placing Google in third place.

Alibaba and IBM shared fourth place with 5% market share each, equating to approximately $1.65 billion in revenue.

Canalys anticipates continued growth, particularly as hybrid cloud solutions integrate with emerging technologies such as 5G and edge computing. “All three [providers] are collaborating with mobile network operators to deploy their cloud platforms at the edge within the operators’ data centers. These efforts are part of broader initiatives to capitalize on 5G services for business clients, as well as modernize the IT infrastructure of mobile operators,” explained Blake Murray, an analyst at Canalys.

Although the rate of pure growth is gradually decreasing over time, this is a natural progression for a maturing market like cloud infrastructure. However, with companies continuing to accelerate the migration of workloads to the cloud during the pandemic, and discovering new applications like 5G and edge computing, the market is poised to continue generating considerable revenue in the foreseeable future.