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Organizations have spent $63.7 billion on cloud infrastructure services during the first quarter worldwide. This is the headline finding from a new report from Synergy Research Group. The report covers three product categories: infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and hosted private cloud.

PaaS includes managed database platforms, while “hosted private cloud” refers to services delivered as dedicated instances to each customer rather than on hardware shared by multiple users. While cloud investments have increased significantly, demand is growing slower than in previous years.

In the first quarter, cloud spending rose by $11 billion compared to the same time a year earlier. It represents a 20% year-over-year increase. However, this growth rate is slower than the 34% seen in the first quarter of 2022. Similar spending increases had been observed during the preceding three years.

How the market breaks down

The report also reveals that Amazon Web Services, Microsoft, and Google captured 65% of cloud infrastructure services spending in the first quarter. AWS had an estimated market share of 32% to 34%. Microsoft and Google accounted for 23% and 10% of the market, respectively, representing a one-percentage-point increase for both companies compared with the year-ago quarter.

While the top three companies dominate the market, the next 20 largest players accounted for 26% of spending.

Oracle, Snowflake, MongoDB, Huawei Technologies, and China’s three largest telecommunications providers are believed to have achieved the fastest year-over-year growth within that group. The remaining 9% of worldwide spending went to other market players.

The cloud market is projected to continue to grow

Gartner projects that worldwide spending on public cloud services will increase from $491 billion last year to $597.3 billion in 2023. Synergy Research also notes that the cloud market continues to grow strongly in all regions of the world. North America, APAC, and EMEA regions have grown by well over 20% year-over-year when measured in local currencies.

Furthermore, the report highlights a significant milestone for Google, whose cloud business produced its first-ever profit in the past quarter.

Google Cloud generated $191 million in operating income on revenue of $7.45 billion during the three months ended March 31, partly thanks to recent changes in the Alphabet Inc. unit’s accounting practices.

Also read: Google’s cloud division posts quarterly profits for the first time