Skip to main content

Cloud Infrastructure Services will Reach $55.8B in 2017

The ongoing shift to cloud computing continues to favor the hyperscale public cloud service providers. That said, there is also a trend to build new local data centers in more countries, where data sovereignty laws require secure storage of data with the nation's border.

The worldwide cloud infrastructure services market grew 49 percent annually, reaching $10.3 billion within Q4 2016, according to the latest market study by Canalys.

Cloud Infrastructure Market Development

AWS continued to dominate with a 33.8 percent global market share, while its three nearest competitors – Microsoft, Google and IBM - together accounted for 30.8 percent of the market.

The four leading service providers were followed by Alibaba and Oracle, which made up 2.4 percent and 1.7 percent of the total.

Canalys forecast the market will reach $55.8 billion in 2017, representing a 46 percent growth from the total value of $38.1 billion in 2016.


Continuing demand is driving the adoption of cloud infrastructure services, which accelerated the cloud data center expansion among key service providers in Q4 2016. AWS launched 11 new availability zones globally in 2016, four of which were established in Canada and the UK in this quarter.

IBM also opened its new data center in the UK, bringing its total cloud data centers to 50 worldwide. Microsoft strengthened its cloud capacity in Western Europe, with new facilities in the UK and Germany.

Google and Oracle set up their first infrastructure in Japan and China respectively, aiming at expanding their footprint in the Asia Pacific region. Alibaba also unveiled the availability of its four new data centers in Australia, Japan, Germany and the United Arab Emirates, highlighting its ambition to drive the presence outside of China.

Outlook for Local Cloud Data Center Growth

"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 Daniel Liu, research analyst at Canalys.

Expanding data center locations across the world and into key economies has been critical in supporting multi-national customers in their digital transformation initiatives. These services are also providing digital platforms for businesses to access new markets and capitalize on new trade opportunities, such as Alibaba’s Tmall Global.

Popular posts from this blog

Why Europe's AI Investment Surge is Strategic

When enterprises begin treating AI budget as the line item they protect last when cutting elsewhere, the market has crossed a threshold that analysts rarely name explicitly. That is precisely where Europe now stands. A new forecast from IDC projects European AI spending will reach nearly $470 billion by 2030, expanding at a 35 percent CAGR over the next five years. European enterprises are allocating capital toward AI because the operational returns on cost efficiency, risk mitigation, and resilience are now demonstrable enough to justify sustained budget commitment. The strategic implication is significant: AI has moved from the innovation portfolio into core operational infrastructure. European AI Market Development Generative AI solutions, already embedded across enterprise deployments, are expected to account for more than 55 percent of the total market by the end of the forecast period.  Software is both the largest technology segment, at 54.9 percent of total spending in 2026...