Public cloud spending shot up to $126 billion in Q1

Public cloud providers spent $28 billion on building, leasing, and equipping their data centre infrastructure to fulfil demand.

Operator and vendor revenues across the major public cloud service and infrastructure markets rose 26% to reach $126 billion in the first quarter of 2022, according to the latest figures from Synergy Research Group.

The biggest growth was in infrastructure and platform as a service (IaaS and PaaS), whose Q1 revenue surged 36% to exceed $44 billion.

Managed private cloud services, enterprise software as a service (SaaS) and content delivery networks (CDN) contributed an additional $54 billion in service revenue, an average rise of 21% compared to the same period a year ago.

With the spike in demand, public cloud providers spent $28 billion on developing, leasing, and equipping their data centre infrastructure: up 20% from the first quarter of 2021.

The demand for data centre hardware was driven by the growth of hyperscale data centre capacity, which rose 18% to meet rapidly growing cloud usage.

Microsoft, Amazon, Salesforce and Google were the companies most strongly represented in the public cloud ecosystem. IBM, Oracle, Adobe, Cisco, Alibaba, Dell, SAP, VMware, Digital Realty and Inspur among the other prominent players.

According to Synergy, these firms together account for 60% of public cloud's total income.

"Public cloud-related markets are typically growing at rates ranging from 15% to 40% per year, with PaaS and IaaS leading the charge," said John Dinsdale, a chief analyst at Synergy Research Group.

"Looking out over the next five years the growth rates will inevitably tail off as these markets become ever-more massive, but we are still forecasting annual growth rates that are generally in the 10% to 30% range."

Dinsdale says the major cloud providers require an ever larger footprint of hyperscale data centres and more raw computing power to enable the cloud service markets to keep up with demand. He expects the market to double in size in the next three-to-four years.

According to Synergy, the USA continues to be the cloud industry's 'centre of gravity'.

In the first quarter, 44% of all cloud service revenues came from the USA, and the country accounted for 51% of the capacity of hyperscale data centres.

Most players in the service and infrastructure market are American companies. The rest primarily consist of Chinese firms.

China accounted for 15% of the hyperscale data centres capacity and 8% of the total revenue for cloud services during the first quarter.