Executive Summary
Hyperscale cloud moved into the last quarter of the year in the midst of an accelerating growth phase. AWS continued along this trajectory in 4Q21, turning in quarterly revenue of nearly $18b and growing at just under 40% y/y. AWS finished the year at $62.2b in revenue, growing ~37% y/y. While Microsoft and Google did not quite follow the same pattern of acceleration, growth is still moving along at a steady and consistent pace near the 50% y/y mark. Meanwhile, Oracle is also showing some signs of acceleration, while Alibaba Cloud continues to be slowed by a number of headwinds.
The growth prospects for this category show no signs of slowing down. The top-line numbers get most of the attention, but the trajectory on the bottom line is also moving forward and speaks to the benefits of scale that are consistently being realized. Growth is driving innovation that translates into margin and profitability, and this is creating the foundation for continual growth that has the potential to accelerate under the right conditions. While larger macroeconomic and environmental factors can and are disrupting things, this kind of favourable environment is forming under the surface.
The colocation market continues to benefit from hyperscale cloud growth and hyperscale-edge deployments like AWS Local Zones are becoming reality and pushing more multi-MW requirements into the pipeline. This demand will be global in scope and regions like Southeast Asia and the Middle East present new and lucrative opportunities. Meanwhile, the limited circle of hyperscale cloud platforms could be seeing new entrants at some point in the next decade. China’s ByteDance launched a new cloud infrastructure service called Volcano Engine, while the subscale cloud category continues to flourish and is likely to give rise to one of the next hyperscale platforms.
This report provides comprehensive growth rate projections and total revenue estimates for the world’s nine hyperscale cloud platforms on a five-year basis. Included are geographic splits and a total market summation. This latest version also features a refresh of our hyperscale cloud region and interconnection node tracking. Hyperscale cloud is projected to reach ~$587b in value in 2026, with a five-year CAGR of ~37%. This represents another uptick from our last quarterly update.
