Gartner Announces Worldwide Public Cloud IaaS Services Revenue Grew 16.2% in 2023

The global Infrastructure as a Service (IaaS) market grew by 16.2% in 2023, totaling US$140 billion, compared to US$120 billion in 2022, according to a forecast by Gartner Inc. Amazon maintained the No. 1 position in the Infrastructure as a Service market in 2023, followed by Microsoft, Google, Alibaba, and Huawei.

“Technologies in A cloud continue to be a major disruptor in business, in part due to hyperscalers’ focus on supporting offerings related to sovereignty, ethics, privacy and sustainability,” says sid nag, Vice President and Analyst at Gartner. “This should continue to drive exponential growth in the future, with these offerings being fueled by investments in Generative Artificial Intelligence (GenAI) for 2024 and beyond.”

In 2023, the top five IaaS vendors accounted for 82% of the market. Amazon continued to lead the global IaaS market with revenue of US$54.6 billion and 39% of market share, followed by Microsoft with 23%. With a growth of 26.3% in 2023, Google moved up to the third position with 8.2%. Alibaba secured the fourth place with 7.9% of the market.

“As the major hyperscalers continue to expand 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. Infrastructure as a Service is the tide that lifts all boats,” says Nag.

According to Gartner analysts, Generative Artificial Intelligence is starting to impact the growth of Cloud markets, although the growth driven by Artificial Intelligence (AI) in 2023 has been small.

“Cloud is the foundational, scalable substrate needed to make GenAI a reality. Segments that are starting to see the impacts of generative AI include IaaS, where training AI models is consuming infrastructure resources, and Software as a Service, where GenAI capabilities are starting to be embedded in software applications,” says Nag. “The demand for capacity in public cloud markets has already increased dramatically as a result and will continue to grow through 2028. In the near term, AI-driven revenue growth will be small relative to the overall public cloud market.”

Gartner customers can read more at “Market Share: Services, Worldwide, 2023" and "Market Share Analysis: Infrastructure as a Service, Worldwide, 2023”. Learn how to maximize the benefits of Cloud Computing in Gartner's free ebook, Devising an Effective Cloud Strategy.