The sales momentum at Amazon.com Inc. and Microsoft Corp. is anticipated to be halted by slower cloud spending by inflation-hit firms, adding to the woes of the industry that fired thousands of workers this month. According to research firm Gartner, end-user cloud spending will increase by 20.7% this year, following growth of 18.8% in 2022 and 52.8% in 2021 for services from the two biggest providers in the world, Amazon Web Services (AWS) and Microsoft’s Azure.
According to RBC Capital Markets analyst Rishi Jaluria, a number of organizations are postponing their migration to the cloud or asking for cheaper pricing on their existing subscriptions.
Source : The New York Times
Satya Nadella, the CEO of Microsoft, stated last week that businesses were being cautious since certain parts of the world are in a recession and there are still many uncertainties.According to Visible Alpha, Azure will increase by 31% 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% gain in sales for the quarter from its profitable cloud division, AWS, which accounts for more than 25% of its total income. It increased 28% between July and September. According to stockbroker 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.
Microsoft has suffered from a downturn in the personal computer sector as well, even if its Windows software is still the industry standard. Amazon is also feeling pressure from the decline in retail demand.
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