2023 May

What to expect from hyperscalers in the future

worm's eye-view photography of ceiling
worm's eye-view photography of ceiling

Three little clouds sat on a hill, growing plump and strong on the sun and the rain. They dreamed of becoming great big hyperscalers, making their mark on the world. And for a while, it looked like they would reach their goal.

Azure, AWS, and GCP have been in a race to the top since they were first conceived. And for a while, it looked like there was no stopping them. They were growing at exponential rates, leaving the competition in the dust. But then something strange happened. During the last earnings season, all three significant hyperscalers saw reductions in their annual cloud revenue growth rates compared to the quarter prior. This has led some to question whether the days of hyper-growth are over for the cloud market. While it's still too early to say for sure, one thing is certain: the days of rampant expansion are over. TheCloud Market has matured, and it's time for the hyperscalers to focus on profitability.

This slowdown comes as no surprise to industry observers. The hyperscalers have been so successful in recent years because they have captured a large share of the market for cloud services. However, this market is now becoming saturated, and the hyperscalers are starting to reach the point of diminishing returns. In other words, they need more room to grow.

The slowdown in the hyperscalers cloud businesses is terrible news for investors, who have been counting on these companies to continue driving strong growth in the stock market. It remains to be seen whether the earnings reports for the next quarter will show any improvement, but for now, the days of explosive growth for the hyperscalers cloud businesses are over.

What to expect from hyperscalers in the future

As users and consumers, we can be excited about new developments and opportunities as these companies lead the way forward.

5/2/20211 min read