Amazon still dominates the cloud with 33% market share during the second quarter, but the overall growth of its Amazon Web Services (AWS) cloud business slowed slightly during the quarter. AWS revenue hit $10.8 billion in Q2, which was up 29% year over year but down slightly from the 33% growth it reported in Q1.

“This is now a $43 billion annualized run rate business, up nearly $10 billion in run rate in the last 12 months,” said Amazon CFO Brian Olsavsky on a call with analysts. “Customer usage remains strong, although growth varies across industries as a result of the COVID-19 crisis.”

When asked about AWS' slowing growth, Olsavsky said customers are looking to cut costs, “especially in the more challenged businesses like hospitality and travel but pretty much across the board.”

And AWS is helping customers save money. “This includes things like scaling down the usage where it makes sense or benchmarking their workloads against our architectural best practices,” Olsavsky said. “So that’s not going to help our usage growth in the short run, but it will help those customers save money. And we think that’s the right thing to do, not only for their success and so they can come out of this at a better shape but also for the long-term health of our relationship with them as an AWS provider.”

At the same time, new customers are moving workloads to AWS to reduce costs because they can scale cloud usage up or down depending on their needs, Olsavsky said. So these new AWS cloud customers offset the slowed spending from existing ones.

Despite soft cloud growth, parent-company Amazon posted $88.9 billion in revenue for the quarter, which was up 40% year over year. It also spent more than $4 billion in COVID-19-related costs during the quarter “to help keep employees safe and deliver products to customers in this time of high demand — purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners,” CEO Jeff Bezos said in a statement.

On the earnings call Olsavsky said Amazon expects to spend $2 billion in COVID-19-related costs in Q3. “Costs are expected to be lower than in Q2 primarily due to better cost efficiency at the high demand levels we are seeing,” he explained.

Amazon’s cloud rivals Google and Microsoft also posted their quarterly results over the past week. And similar to AWS, No. 2 cloud provider Microsoft reported slowed Azure cloud business growth. Azure revenues for the quarter increased 47% year over year. However, that rate of growth was less than the 61% increase posted for its earlier quarter, which drew analyst concerns.

Meanwhile Google Cloud revenues jumped 43% year over year during the second quarter. The No. 3 cloud provider brought in $3 billion for Q2, compared to $2.1 billion a year ago, and $2.77 billion last quarter.

“As far as cloud market numbers go, it’s almost as if there were no COVID-19 pandemic raging around the world,” said John Dinsdale, a chief analyst at Synergy Research Group, in a statement. “As enterprises struggle to adapt to new norms, the advantages of public cloud are amplified. The percentage growth rate is coming down, as it must when a market reaches enormous scale, but the incremental growth in absolute dollar terms remains truly impressive. The market remains on track to grow by well over 30% in 2020.”

Synergy Research Group’s latest report shows that Q2 spend on cloud infrastructure services passed the $30 billion milestone, an increase of $7.5 billion from the second quarter of 2019. This continues the trend of ever-larger increments in cloud spending.

Amazon market share remained at its long-standing mark of around 33%, with Microsoft at 18% for the third consecutive quarter, and Google share nudged up to 9%. After the big three, Alibaba took 6%, IBM had 5%, Salesforce had 3%, and both Tencent and Oracle remained at 2%. The top eight cloud providers now account for 77% of the worldwide market.