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Cloud Market Q3 Snapshot: Azure Is Fastest, But AWS Is Biggest
There's very little room for movement in the cloud market leader board, according to the latest assessment by market researcher Synergy.
The firm recently released its analysis of the cloud market for the third quarter of 2018 and found that the top five performers -- Amazon Web Services (AWS), Microsoft, IBM, Google and Alibaba -- comprised nearly 75 percent of the overall global market.
That's bad news for everyone else, including even relatively big-name cloud providers like Salesforce.com, Oracle and Rackspace. Despite whatever revenue gains these smaller providers may have seen, they still lack the scale they need to compete meaningfully with the leaders.
"Given the need for huge scale, most cloud providers outside of the top five are being forced to focus on market niches or specific geographic regions," said Synergy Chief Analyst John Dinsdale in a prepared statement.
In terms of market share growth, Microsoft, Google and Alibaba -- which has been particularly ascendant this year -- all grew significantly faster than the overall market, which Synergy clocked at 45 percent.
Source: Synergy Research Group
Of these, Microsoft's Azure cloud share grew the most. In its most recent earnings report, Microsoft indicated that Azure revenues went up 76 percent year over year. By Synergy's accounting, that growth amounted to a 2.5 percent uptick in Azure's market share, putting it at nearly 15 percent.
Azure remains a very distant runner-up, however, to longtime market leader AWS, which has a market share just north of 34 percent.
AWS revenues increased by just 46 percent year over year in this latest quarter -- a much more sedate pace compared to Azure. But that's just down to "the law of large numbers," according to Dinsdale, and not a sign that AWS would be ceding its lead anytime soon.
In fact, it's just the opposite; AWS currently owns more of the market than its four closest rivals combined.
"You cannot keep on growing at 100% when you reach massive scale," Dinsdale said. "Interestingly, the role model for sustainable growth is market leader Amazon. Over the last ten quarters the AWS year-on-year growth rate in these markets has been pretty steady and has averaged just a little under 50%."
Of the leaders, only IBM showed a slight bobble. Big Blue's market share fell a half-percent to about 7 percent, though Synergy noted its continued strength in the "hosted private cloud services" space. Time will tell how IBM's recently announced acquisition of Red Hat will impact its standing, particularly in the hybrid cloud.