Amazon consolidates lead in cloud services: Gartner

Published: 28 August 2018 - 7:12 a.m.
By: David Ndichu

Amazon dominates the global cloud services market, the latest Gartner figures show.

According to the research firm, Amazon leads in the cloud category referred to as infrastructure as a service (IaaS) market with a 51.8 % share. This earned Amazon $12.2 billion in 2017, up 25% from 2016.

The strong growth for Amazon in 2017 was driven not only by customers that are migrating from traditional data centres to cloud IaaS, but also by customers implementing transformational digital business projects, reflecting its broad range of use cases, Gartner said.

Generally, the worldwide infrastructure as a service (IaaS) market grew 29.5% in 2017 to total $23.5 billion, up from $18.2 billion in 2016. Amazon is followed by Microsoft, Alibaba, Google and IBM in that order. These four market leaders represent approximately 73% of the total IaaS market

"The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organisations and as cloud availability expands into new regions and countries," said Sid Nag, research director at Gartner. "Cloud-directed IT spending now constitutes more than 20% of the total IT budget for organisations using cloud. Many of these organisations are now using cloud to support production environments and business-critical operations."

Microsoft grew by a massive 98% on its IaaS offering to maintain second position, with revenue surpassing $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its Microsoft Azure offering, which is a collection of infrastructure and platform (PaaS) services.

In the third spot, Alibaba's 2017 growth of 63% reflects the company's successful investment in research and development (R&D), said Gartner. Alibaba has the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to its hyperscale cloud provider rivals in select regions.

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