Report Shows AWS Slow To Yield Ground to Fast-Growing Competitors
With a 31 percent worldwide market share in the cloud infrastructure market, Amazon Web Services Inc. (AWS) is maintaining a solid lead over competitors who are themselves enjoying growth rates of well more than 100 percent, according to new data from Synergy Research Group.
"The big three followers -- Microsoft, IBM and Google -- in aggregate accounted for 22 percent of the market, while the next 20 top-ranked cloud providers accounted for another 27 percent," the research firm said. "The good news for Microsoft and Google is that they both achieved growth rates of well over 100 percent so they are at least slowly gaining some ground on the market leader."
Further down the line, however, the picture isn't so rosy for those wanting to carve out a piece of the lucrative cloud pie.
"Outside of the big four, the next 20 cloud providers are growing at an average 41 percent per year, but in a market that is growing at over 50 percent that means that most of them are losing market share," Synergy said.
The aforementioned lucrative cloud pie is also growing, according to new Q1 data. "With most of the major operators having now released their earnings data for Q1, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and private & hybrid cloud) have now comfortably passed the $7 billion milestone," Synergy said.
Indeed, parent company Amazon last week announced quarterly financial results bolstered heavily by the AWS cloud unit. As reported here, AWS "topped Wall Street estimates for the quarter-ended March 31, raking in $2.57 billion in revenue. That's a nearly 64 percent increase from the year-ago period and 7 percent higher than the previous quarter. At this pace, AWS is well on its way to meeting the $10 billion run rate that Amazon.com CEO Jeff Bezos forecasted in a letter to shareholders earlier this month."
Synergy said the U.S. continues to account for the lion's share of the worldwide market.
"This is a market that is so big and is growing so rapidly that companies can be growing by 10-30 percent per year and might feel good about themselves and yet they’d still be losing market share," said exec John Dinsdale. "The big question for them is whether or not they are building a sustainable and profitable business. This can be done by focusing on specific regions or specific services, but the bulk of the market demands huge scale, a broad footprint, very deep pockets and a long-term corporate focus."
About the Author
David Ramel is an editor and writer for Converge360.