The Top Companies in the Cloud Computing Space

Cloud computing has made inroads across industries, sectors, companies, institutions and governments. At a time when the technology sector is under stress, cloud computing has remained relatively resilient. Worldwide IT spending is projected to total $4.5 trillion in 2023, an increase of 2.4% from 2022. Gartner also estimates the worldwide end-user spending on public cloud services to grow 20.7% to $591.8 billion in 2023, up from $490.3 billion in 2022. This will be higher than the 18.8% growth in 2022.

Here's an overview of the major companies operating in cloud computing, and how they have fared during the current challenging environment.

Leading Cloud Computing Companies

1. Amazon’s (AMZN) Amazon Web Services (AWS) continues to be the market leader in cloud computing. It dominated 34% of the cloud infrastructure services market in Q3 CY2022. During FY2017 (January–December), AWS earned $17.46 billion in revenue, which increased to $25.66 billion and $35.02 billion in FY2018 and FY2019, respectively. During FY2020 and FY2021, AWS posted a revenue of $45 billion and 62.2 billion. During the Q3 FY2022, AWS reported a revenue of $20.53 billion vis-à-vis $16.11 billion during Q3 FY2021. Amazon will be reporting its Q4 FY2022 numbers on February 2, 2023.
2. Microsoft (MSFT) has been highly focused on cloud since Satya Nadella took over the reins, closing in on its gap with AWS. Microsoft captured 21% of the market in Q3 CY2021. In Q1 FY 2022, Microsoft Cloud generated $20.7 billion in revenue. This is the first time when Microsoft Cloud’s quarterly revenue surpassed the $20 billion mark. During its recent Q2 FY2023 (July–June), Microsoft Cloud revenue was $27.1 billion, up 22% year-over-year. “The next major wave of computing is being born, as the Microsoft Cloud turns the world’s most advanced AI models into a new computing platform,” said Satya Nadella, chairman and CEO of Microsoft.
3. Google (GOOG, GOOGL) ranks among the top cloud players with a worldwide market share of 11%. Over the past few years, Google has intensified its efforts to catch up with the leaders in cloud computing. During FY2017 (January–December), the revenue from Google Cloud was $4.05 billion, equivalent to 3.7% of its overall revenue, which touched double-digit figures at $13.06 billion in FY2020. In FY2021, its revenue from cloud was registered at $19.2 billion, an increase of 47%. During the first three quarters of FY2022, Google’s cloud revenue touched $18.96 billion. Alphabet is expected to report earnings for FY2022 on February 2, 2023.
4. Salesforce.com, Inc. (CRM) is among the most innovative companies in the world and earns majority of its revenue from cloud computing. It offers cloud services with a focus on Customer Relationship Management (CRM). During its Q3 FY2023 (February–January) earnings call, the company reported a growth of 12% year-over-year across its cloud segments led by Sales Cloud, Service Cloud and its Marketing and Commerce Clouds. Salesforce has been positioned as a leader in Magic Quadrant for Configure, Price, Quote (CPQ) Application Suites by Gartner for five consecutive years.
5. Cloud is an important component of International Business Machines Corporation’s (IBM) “strategic imperatives.” Within cloud, IBM has focused on the hybrid, multi-cloud segment. During its recent earnings call, Senior Vice President and CFO Jim Kavanaugh said, “Clients are partnering with IBM Consulting as they decide what applications to modernize and how to migrate those applications across hybrid, multi-cloud environments.” During FY2022 (January-December), IBM’s hybrid cloud revenue was over $22 billion, up 11% from FY2021. 
6. During the FY2022 (December–November) earnings call, Adobe (ADBE) CEO Shantanu Narayen said, “Adobe Creative Cloud, Document Cloud and Experience Cloud have become the foundation of Digital Experiences, starting with the first creative spark, to the creation and development of all content and media, to the personalized delivery across every channel.” The results for FY2022 suggest that Adobe’s Document Cloud revenue grew 21% year-over-year. Net new Digital Media Annualized Recurring Revenue (ARR) was $1.91 billion. The company’s Creative revenue grew 10% while its Digital Experience subscription representing 15% year-over-year growth.
7. Alibaba’s (BABA) cloud segment is comprised of Alibaba Cloud and DingTalk. The company ranked as the third-largest Infrastructure-as-a-Service (IaaS) provider in the world and the biggest in Asia Pacific in 2021 by revenue. During FY2022 (April–March), the revenue after inter-segment elimination (excludes revenue from services provided to other Alibaba businesses) was reported at $11.76 billion, up 23% year-over-year. Alibaba has been focusing to make its cloud segment revenue more diversified. During Q2 FY2023, cloud revenue after inter-segment elimination was reported at $2.9 billion with revenue growth from non-internet industries growing 28% year-over-year and contributing 58% of overall cloud revenue.
8. Huawei, a privately held company, is the second-largest cloud service provider in China (Q3 CY2022) accounting for 19% of the market after Alibaba. Huawei is among the world's fastest growing major cloud service providers and now counted among the top five IaaS players with a market share of 4.6% in 2021. According to a report by Canalys, “Huawei Cloud’s new partner program announced in April brought a large number of partners into Huawei Cloud’s channel ecosystem.” Huawei Cloud has continued to expand its global data centers and acceleration networks.
9. Oracle (ORCL) is one of the four companies along with Amazon, Google and Microsoft to be awarded contracts to provide services in support of its Joint Warfighting Cloud Capability by the U.S. Defense Department. During Q2 FY2023 (June–May), the revenue from Oracle’s cloud services and license support revenues reported at $8.6 billion, up 14%. Cloud license and on-premises license revenues were up 16% to $1.4 billion. During the earnings call, Safra Catz, CEO, Oracle said, “Our business continues to accelerate; we expect organic growth for our fiscal year. 2023 cloud revenues will be over 30% in constant currency.”

Some of the other prominent names in the cloud computing space are SAP (SAP), Cisco (CSCO), Digital Reality (DLR), Inspur, Dell (DELL), VMWare (VMW) and Rackspace (RXT). Together, these 15 companies account for 60% of all public cloud-related revenues. 

Disclaimer:

The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. Adobe’s fiscal year is a 52/53-week year, ending on the Friday closest to November 30 each year.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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