Fueled by enterprise demand for data analytics, machine learning, data center consolidation and cloud-native application development, spending on cloud infrastructure services jumped 33% year-on-year to reach $62.3 billion in the second quarter, according to Canalys.

The Singapore-based market research firm said its latest cloud spending research shows demand for cloud services remains strong despite a global economy suffering from inflation, rising interest rates and recession. .

Google, Microsoft and Amazon collectively accounted for nearly two out of every three dollars spent on cloud infrastructure globally last quarter, Canalys noted.

The company defines cloud infrastructure services as those that provide IaaS (infrastructure as a service) and PaaS (platform as a service), through private or public hosting environments. It excludes direct sales of SaaS (software as a service) applications, but includes revenue from the infrastructure services used to host and operate them.

According to figures from Canalys, AWS alone accounted for about a third of global cloud infrastructure revenue in Q2 2022, or $19.3 billion out of $62.3 billion in total, representing an increase of 33% year-over-year of Amazon’s numbers. Azure was in second place, with 24% of the market after 40% annual growth, and Google Cloud was third, with 45% growth accounting for 8% of the total market share.

Azure’s growth rate means that Microsoft has continued to edge closer to Amazon for primacy in this market, according to Canalys. The research firm’s vice president, Alex Smith, said Microsoft’s record number of major deals in the $100 million and $1 billion ranges were the product of a broad product portfolio and… tight integration with software partners.

“While opportunities abound for vendors large and small, the interesting battle remains at the top between AWS and Microsoft,” he said in a statement announcing Canalys’ results. “The race for infrastructure investment to keep pace with demand will be intense and will test the nerves of corporate CFOs, as inflation and rising interest rates create headwinds on the costs.”

Cloud providers create infrastructure

Despite these headwinds, however, Amazon and Microsoft have continued to aggressively build capacity, according to the researchers – the latter announced 10 new cloud regions, which will be available next year, and the former announced eight, divided into 24 new Availability Zones in the same time frame.

According to Canalys research analyst Yi Zhang, demand is expected to continue to rise as companies increasingly move critical parts of their infrastructure there.

“Most companies are past the initial stage of moving some of their workloads to the cloud and are considering migrating key services,” he said in a statement. “Major cloud providers are accelerating their partnerships with various software companies to demonstrate a differentiated value proposition. Recently, Microsoft indicated extended services to migrate more Oracle workloads to Azure, which in turn are connected to databases running in Oracle Cloud.”