Canalys: Global cloud spending surged 21% in Q3 2024

Global Q3 spending on cloud infrastructure services increased by 21% year on year, reaching US$82.0 billion, according to recent data by Canalys. Customer investment in the hyperscalers’ AI offerings is believed to have fueled growth, prompting leading cloud vendors to escalate their investments in AI.

The rankings of the top three cloud vendors – AWS, Microsoft Azure and Google Cloud – remained stable from the previous quarter, with these providers together accounting for 64% of total expenditure. Total combined spending with these three providers grew by 26% year on year, and all three reported sequential growth. Market leader AWS maintained a year-on-year growth rate of 19%, consistent with the previous quarter. But it was outpaced by both Microsoft, with 33% growth, and Google Cloud, with 36% growth. In actual dollar terms, however, AWS outgrew both Microsoft and Google Cloud, increasing sales by almost US$4.4 billion on the previous year.

With the increasing adoption of AI technologies, demand for high-performance computing and storage continues to rise, putting pressure on cloud providers to expand their infrastructure. In response, Canalys says leading cloud providers are prioritizing large-scale investments in next-generation AI infrastructure. To mitigate the risks associated with under-investment – such as being unprepared for future demand or missing key opportunities – they have adopted over-investment strategies, ensuring their ability to scale offerings in line with the growing needs of AI customers.

“Continued substantial expenditure will present new challenges, requiring cloud vendors to carefully balance their investments in AI with the cost discipline needed to fund these initiatives,” said Rachel Brindley, Senior Director at Canalys. “While companies should invest sufficiently in AI to capitalize on technological growth, they must also exercise caution to avoid overspending or inefficient resource allocation. Ensuring the sustainability of these investments over time will be vital to maintaining long-term financial health and competitive advantage.”

Channel Impact^®
Channel partners should anticipate similar growth trajectories continuing on this path well into 2025.