Date
19 November 2017
Amazon founder Jeff Bezos. AWS continues its dominance of the infrastructure-as-a-service market in the most recent quarter. Photo: Reuters
Amazon founder Jeff Bezos. AWS continues its dominance of the infrastructure-as-a-service market in the most recent quarter. Photo: Reuters

Cloud market growth tops 40%; Amazon still surging

As a trio of major tech companies released their quarterly earnings reports, tech behemoths Amazon, Google and Microsoft again managed to impress Wall Street.

In particular, Amazon’s cloud computing arm, AWS, continues its dominance of the infrastructure-as-a-service market in the most recent quarter.

Amazon reported AWS quarter revenue of US$4.58 billion, higher than the US$4.51 billion expected by analysts.

Based on the earnings data for the third quarter, Synergy Research, an analyst firm that tracks cloud market share, estimates that quarterly cloud infrastructure service revenues have now reached US$12 billion and continue to grow at well over 40 percent a year.

According to the firm, Amazon Web Services (AWS) is still managing to nudge its market share upwards, controlling 35 percent of the market. “AWS is in a league of its own,” it said.

But the competition is increasingly intense, as the firm found that Microsoft, Google and Alibaba are all growing their revenues much more rapidly than Amazon and they continue to gain market share.

“Microsoft and Google too deserve plaudits for the growth rates they are achieving, while IBM is gaining market share in its sweet spot of hosted private cloud services. It is becoming increasingly difficult for cloud providers outside of the leading pack to make an impression on the market share rankings,” said John Dinsdale from Synergy Research.

Dinsdale told TechCrunch that the “majority of what is included in Microsoft’s cloud numbers is software/SaaS [software as a service]. Microsoft is the leader in the SaaS market by a big margin but it trails dramatically when it comes to infrastructure”, where Microsoft’s Azure platform operates.

Synergy Research’s findings are consistent with Canalys, an analyst firm for the technology industry, which shows AWS owns a slightly lower 31 percent market share.

According to Canalys, the four largest cloud service providers all maintained their momentum and expanded their combined share to 57 percent of the total market. As Canalys reports, AWS’s revenue is up 42 percent year on year, while Microsoft (up 90 percent) and Google (up 76 percent) grew more impressively, closing the gap on AWS.

“AWS will continue to benefit from its first-mover advantage, broadest cloud services portfolio and strong awareness among developers. But Microsoft’s substantial growth, driven by its huge enterprise installed base, compatibility with its Office portfolio and enhanced hybrid cloud solutions, means it will remain AWS’ closest competitor,” said Daniel Liu, Research Analyst at Canalys.

AWS owned 30.3 percent of the cloud infrastructure services market in the second quarter, more than double the market share of its closest competitor, Microsoft Azure, which had 13.8 percent, Matthew Ball, an analyst at Canalys, told CNBC in September. 

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BN/RA

EJ Insight writer

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