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Analysts: Cloud Infrastructure Market Still Amazon's To Lose
Despite showing slower-than-typical growth in its most recent financial quarter, Amazon Web Services (AWS) is still the runaway leader of the public cloud market, according to a pair of recent studies.
Based on newly released data from Synergy Research Group on the state of the public Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) market, AWS' market share in the fourth quarter of 2016 was just over 40 percent. That's almost double that of its three nearest competitors -- Microsoft, Google and IBM -- which together made up 23 percent.
In its Q4 FY2016 earnings report last week, AWS reported year-over-year growth of 47 percent -- still impressive but, by the cloud giant's standards, its slowest on record. In fact, Synergy's data indicates that AWS' market share remained mostly unchanged between 2015 and 2016, while the three-vendor chase group behind it grew by 5 percent, "helped by particularly strong growth [by] Microsoft and Google."
For the rest of the public cloud field, however, the race looks grim. The next group of 10 vendors -- notable members include Alibaba and Oracle -- saw their collective market share slip by 1 percent year over year in the fourth quarter. That's bad news for Oracle, which has lately been ramping up its IaaS portfolio in a bid to directly challenge AWS. The rest of the market, which includes an unspecified number of "small-to-medium sized cloud service providers," dropped by 4 percent.
Source: Synergy Research Group
"While a few cloud providers are growing at extraordinary rates, AWS continues to impress as a dominant market leader that has no intention of letting its crown slip," said Synergy Chief Analyst and Research Director John Dinsdale in a prepared statement.
AWS has demonstrated a commitment to expanding both its infrastructure and its services portfolio, according to Dinsdale. In its earnings report last week, AWS said it opened 11 new cloud datacenter regions and added 1,017 new services in 2016. Such expansion is key to "achieving and maintaining a leadership position," Dinsdale said.
A separate study by analyst firm Canalys also highlights the importance to cloud infrastructure providers of expanding their datacenter footprints. In a media alert released Monday, Canalys noted that ever-increasing demand for cloud infrastructure services worldwide has necessitated massive datacenter build-outs among the leading providers -- particularly in geographies where data sovereignty laws are stringent.
"Strict data sovereignty laws and customer demand are pushing cloud service providers to build data centers in key markets, such as Germany, Canada, Japan, the UK, China and the Middle East; where personal data is increasingly required to be stored in facilities that are physically located within the country," said Canalys Research Analyst Daniel Liu in a prepared statement. "Expanding data center locations across the world and into key economies has been critical in supporting multi-national customers in their digital transformation initiatives."
Canalys' market share figures differ from Synergy's -- not surprising, given the variations in each companies' proprietary datasets and measurement tools -- but the top standings are the same. The lion's share of the cloud infrastructure arena in Q4 belonged to AWS, according to the firm, with 33.8 percent of the market. Behind it were Microsoft, Google and IBM, which together accounted for 30.8 percent. Trailing the leaders, once again, were Alibaba and Oracle, with 2.4 and 1.7 percent of the market, respectively.
Source: Canalys