Separator

Amazon, Microsoft to Witness Slow Down on Cloud Spending

Separator

The sales momentum at Amazon.com Inc. and Microsoft Corp. is anticipated to be interrupted by slower cloud spending by inflation-hit firms, adding to the woes of the industry that fired thousands of workers this month.

After years of explosive growth, primarily fueled by remote work and schooling during the pandemic, analysts noted that cloud demand has slowed over the last nine months and that sales growth may decrease even further.

According to research firm Gartner, end-user cloud spending for services from the two biggest providers in the world, Amazon Web Services (AWS) and Microsoft's Azure, is anticipated to increase by 20.7 percent this year, following increases of 18.8 percent in 2022 and 52.8 percent in 2021.

"A lot of companies are slowing their migration to the cloud or asking for a lower price on their existing plans," says RBC Capital Markets analyst Rishi Jaluria.

According to brokerage UBS earlier this month, easy to shift workloads are already in the cloud and it will be more difficult for providers to persuade companies to move the upcoming wave of workloads to their platforms.

According to Visible Alpha, Azure will increase by 31 percent in the December quarter, which will be the slowest growth since the Redmond, Washington-based business began disclosing the unit's data in 2015.

Amazon is anticipated to report a 24 percent gain in sales for the quarter from its profitable cloud division, AWS, which accounts for more than 25 percent of its total income. It increased 28 percent between July and September.

The third-largest cloud provider, Alphabet Inc., is anticipated to feel the effects of the slowdown as well, which analysts said is an indication that the sector as a whole is maturing.

According to brokerage UBS earlier this month, easy to shift workloads are already in the cloud and it will be more difficult for providers to persuade companies to move the upcoming wave of workloads to their platforms.

Current Issue
Compliance And Quality Assurance(CAQA): Offering Tailor-Made Quality Assurance & Risk Management Solutions