Build-Outs to Set AI/ML Records for Year While Traditional Spending Declined
Incline Village, NV. Feb. 22, 2024 — According to a newly released report issued by founding analysts of 650 Group, US Hyperscaler Cloud market revenue grew over 10% in 2023. Revenue and CAPEX shifted significantly in 2023 as Hyperscalers, such as Amazon AWS, Microsoft Azure, and Google Cloud (GCP) prioritized AI/ML and worked off excess inventory.
650 Group’s Cloud Report covers the networking infrastructure areas including: Colocation, IaaS, SaaS, and Search & Social.
2023 Cloud Hyperscaler Highlights:
- Different approaches to AI/ML impact supplier market shares
- Hyperscaler IaaS revenue growth outpaces Search and Social revenue
- US Hyperscaler made over $65M in Cloud revenue every hour during 2023
- Network and compute utilization and expertise cause each hyperscaler to spend differently to get the same level of output from their equipment
- AWS, Azure, and GCP stay dominant in IaaS; Oracle and OVH are catching up while others fall behind
- Hyperscalers are poised to ramp next-generation server and networking architectures over the next two years focused on AI/ML; this is a new class of AI/ML-focused hardware
“2023 IaaS revenue hit a record, far exceeding that of previous records,” said Alan Weckel, founding analyst for 650 Group. “Many cloud providers made significant, company-changing bets during the second half of 2023, and we expect the activity to change the cloud market, and especially the way computing, networking, and storage are deployed in the future. As a result, CAPEX and investments are set to soar as AI/ML within IaaS offerings start to really take off. ”
650 Group Cloud reports include CAPEX studies for the Colocation, IaaS, SaaS, and Search and Social Media markets, including a unique look at spending specifically for data center equipment. In addition, going beyond just Cloud revenue provides a unique look into where and how the largest Cloud providers deploy equipment. Finally, the report shows the trend towards more CAPEX spending in IaaS as many SaaS providers choose IaaS instead of building their own infrastructure.
About 650 Group
650 Group is a leading Market Intelligence Research firm for communications, data center, and cloud markets. Our team has decades of research experience, has worked in the technology industry, and is actively involved in standards bodies. 650 Group focuses on leading-edge market trends and research and prides itself on being the first to market research with over 12 research programs focused on cloud trends.