Executives from Amazon, Microsoft, and Google reported that clients are seeking to cut costs despite the growing cloud-computing market. As a result, revenue growth in their cloud divisions has slowed down. The deceleration began in 2022 when fears of a recession hit the economy. In April 2023, Amazon Web Services (AWS) revenue growth slumped by about five percentage points from the first-quarter growth rate of almost 16%, according to Amazon finance chief Brian Olsavsky.
Similarly, cloud growth at Google slowed to 28% in the first quarter from 32% in the prior period, even though the cloud segment achieved profitability for the first time on record. Alphabet’s finance chief Ruth Porat cited “headwind from slower growth of consumption with customers really looking to optimize their costs given that macro climate.” However, the companies remain optimistic that cloud will continue to be a strong market for tech as businesses have yet to fully benefit from its advantages.