Dark Skies for The Cloud

There are signs of strain for a business that Big Tech has seen as its next big profit center

For a while, cloud computing was Big Tech’s cash machine. As the digital economy grew, companies across the economy developed a greater need for flexible data storage and processing power. This created an opportunity for tech companies to rent out such capacity. The pandemic accelerated the trend, creating years of good news for Alphabet, Amazon, and Microsoft.

Their cloud computing businesses are still getting bigger, but not as quickly as they once were. The rate of growth for each of the three market leaders in the fourth quarter fell at least 10 percentage points from the previous nine months. That’s partially because a shaky economy means “every dollar is being inspected” at existing customers, says Rikin Shah, founder, and chief executive officer of Slower.ai, which helps companies migrate to the cloud. Most cloud infrastructure is priced based on usage—so customers can lower their bills by simply using less. Amazon.com Inc. Chief Financial Officer Brian Olsavsky said on a Feb. 2 earnings call that mortgage lending and crypto trading were two examples of the many slowing industries dragging cloud growth.