As expected, companies are continuing to cut back on their cloud spend where possible, as tech budgets continue to get careful scrutiny. That resulted in a quarter in which the cloud grew 19%, up $10 billion over last year to $63 billion. That doesn’t sound too terrible, except when you compare the numbers to last year when the market grew 32%.

Clearly we are still in a cost-cutting cycle and it’s having an impact on cloud infrastructure revenue growth, but Synergy Research reports that there are signs we could be coming out of the recent doldrums. Synergy’s chief analyst John Dinsdale says that overall the market remains solid, and we are starting to see a shift in some of the trends that have been contributing to the the downward growth.

“There has been some angst about declining cloud growth rates, but the Q1 worldwide market value grew by more than $10 billion compared with the first quarter of 2022. Clearly the relatively weak economy has caused some enterprises to more closely review spending on cloud services, but the market continues to grow despite those challenges,” Dinsdale wrote in a comment to the press.

He points out that the Chinese market has returned to growth and exchange rate pressure has started easing, contributing to growth in the EMEA and APAC regions. “The law of large numbers pretty much dictates that growth rates must decline, but in absolute terms the market continues to grow at a healthy rate, driven by the fundamental benefits of cloud adoption,” Dinsdale said.

It’s fair to say that most industries would be happy with a growth rate that’s nearly 20% in this economic climate, but the cloud has been dealing with rates in the high 30s until recently, so it feels worse, and as we’ve learned, perception counts.

This is especially true for Amazon, where AWS has been the growth engine for the company for more than a decade and it’s suddenly looking at a quarter where the growth plunged into the teens to 16%. Again, for a mature company, that doesn’t feel that horrible, but the cloud revenue numbers continue to trend down from the 20% rate the company saw the prior quarter.

Meanwhile, Azure growth continued to drop too. While Microsoft’s cloud arm grew at a higher rate than Amazon at 27%, that was down from 31% the prior quarter. Google Cloud was up 27.5%, slowing from 32% the prior quarter, but turning a profit for the first time.

What impact does all of that have on market share? Well, as it turns out, not that much. Amazon has owned a fairly steady third of the market for years, even as the pie has grown. Microsoft has been gaining slowly but steadily, and Google has reached 10% and so far is holding steady there. The big three account for 65% of the total revenue.

For the quarter, AWS continues to have 32% market share, good for over $20 billion for the quarter, Microsoft held steady from the prior quarter at 23%, good for over $14 billion in revenue for the quarter, and with 10% Google Cloud took in over $6 billion.

Synergy looks at infrastructure and platform as a service, as well as hosted private clouds, to come up with its market numbers.

Nothing goes up forever, but there are signals on the horizon that perhaps the cloud infrastructure market will return to growth. There is certainly still plenty of room, especially with these companies looking at adding data-intensive AI workloads, and with that, the market should stabilize over time.