Spending on cloud infrastructure services hit $55.9 billion in the March quarter, a massive 34% on-year increase, as organisations across the globe focussed on digitalisation strategies amid market challenges, according to the latest data from market research company Canalys.

The latest Canalys data estimates the expenditure to be $2 billion higher than the previous quarter and $14 billion more than the first quarter of 2021. The top three cloud service providers benefited hugely from increased adoption and scale, growing 42% on year and cornering 62% of the global customer spend.

“Cloud has continued to be a hot market and transformation strategies are emphasizing digital resiliency to face the market challenges of today and tomorrow,” Canalys Research Analyst Blake Murray said.

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“To be effective in resiliency planning, customers are turning to channel partners with the technical and consulting skills to help them effectively embrace hyperscaler cloud services.”

The huge spending on cloud infrastructure comes on the back of cloud-enabled business transformation — a priority for organisations facing cybersecurity threats, supply chain issues, and geopolitical instability. This has led to organisations of varying sizes and vertical markets to turn to cloud to create flexibility and resilience.

Infrastructure hardware shortages and the threat of inflation has also spurred many large enterprises to invest in multi-year cloud contracts as they attempt to lock in upfront discounts. As a result, all major service providers have witnessed significant order backlogs totalling several hundred billion dollars across the globe.

“As the use cases for cloud infrastructure services expand so does the potential complexity, and we see that hybrid and multi-cloud deployments are commonplace in the market,” Canalys Research Analyst Yi Zhang said.

“The hyperscalers are investing in rapid channel development and partners are responding as the opportunities grow.”

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Amazon Web Services remained the top cloud service provider in the first quarter, with 33% of the total spend. It recorded an on-year growth of 37%. The company also announced key deals with a focus on telecommunications as companies such as Verizon, T-Systems, and Telefónica jumped on the bandwagon.

Microsoft Azure was second on the list, growing 46% to corner a 21% market share. Google Cloud was the fastest growing cloud service provider, with 54% on-year growth during the quarter for an 8% share of the market.