Skip to main content

Global Hyperscale Cloud Providers Dominate IaaS Growth

Leading public cloud service providers continue to gain market share across the globe. The cloud Infrastructure as a Service (IaaS) market grew 37.3 percent in 2019 to reach $44.5 billion -- that's up from $32.4 billion in 2018, according to the latest worldwide market study by Gartner.

Amazon (AWS) retained the number one position in the IaaS market in 2019, followed by Microsoft (Azure), Alibaba, Google and Tencent. The remaining cloud service providers are essentially niche players, by comparison.

"Cloud underpins the push to digital business, which remains at the top of CIOs’ agendas," said Sid Nag, vice president at Gartner. “It enables technologies such as the edge, AI, machine learning and 5G, among others."

Public Cloud IaaS Market Development

Each emerging technology requires a scalable, elastic and high-capacity infrastructure platform like public cloud IaaS. In 2019, the top five IaaS providers accounted for 80 percent of the market -- that's up from 77 percent in 2018. Three-quarters of all IaaS providers exhibited growth in 2018.

AWS continued to lead the worldwide IaaS market with an estimated $20 billion of revenue in 2019 and 45 percent of the total market. Amazon leveraged its top spot in 2018 to build out its capabilities beyond the IaaS layer in the public cloud stack and maintain its position in 2019.

Azure remained in the second position within the market, gaining more than half of its nearly $8 billion in revenue coming from North America. Microsoft’s IaaS offering grew 57.8 percent in 2019, as they applied enterprise sales co-selling with other Microsoft cloud products and services.

The dominant IaaS provider in China, Alibaba Cloud, grew 62.4 percent in 2019 with revenue surpassing $4 billion -- that's up from $2.5 billion in 2018. Moreover, Alibaba will expand its cloud infrastructure and aim to offer cloud-based intelligent solutions to enable digital transformation.

China-based Tencent grew its IaaS offering by over 100 percent in 2019. It is the second-largest provider of cloud services in China, after Alibaba.

"As the cloud market matures, and its leaders experience natural market share erosion as a result, China-based providers such as Alibaba, Tencent and Huawei will start to gain more traction. It will also be hard for other providers to enter the China market given the country’s highly regulated environment," said Mr. Nag.

Google’s IaaS revenue grew from $1.3 billion in 2018 to $2.4 billion in 2019, experiencing 80.1 percent growth. Google’s cloud services focused on providing organizations with industry-specific solutions on robust computing infrastructure. North America accounts for nearly half of Google’s IaaS revenue.

Moving forward, Gartner will be combining the IaaS and platform as a service (PaaS) segments into a single, complementary platform offering -- entitled cloud infrastructure and platform services (CIPS).

The worldwide CIPS market grew 42.3 percent in 2019 to total $63.4 billion -- that's up from $44.6 billion in 2018. Amazon, Microsoft and Alibaba secured the top three positions in the CIPS market in 2019, while Tencent and Oracle were in a virtual tie for the number five position with 2.8 percent of the market.

Outlook for CIPS Market Growth Opportunities

"There will be a continued push of cloud spending as an outcome of the coronavirus pandemic," said Mr. Nag. "When enterprises were compelled to move their applications to the public cloud as a result of the pandemic, they realized the true benefits of public cloud and it is unlikely that they will change course."

According to the Gartner assessment, during the pandemic recovery and rebound phase, CIOs are recognizing that they don’t need to bring workloads back on-premises, which will further increase cloud spending and drive new applications around cloud-hosted collaboration that incorporate emerging technologies such as virtual reality and immersive video experiences.

Niche public cloud service providers will continue to seek out small pockets of large enterprise applications that they can pursue with some degree of success. That said, industry analysts must scrutinize niche cloud provider revenue reporting. Key growth trends must be reported accurately.

Popular posts from this blog

AI Semiconductor Revenue will Reach $119.4B

The Chief Information Officer (CIO) and/or the Chief Technology Officer (CTO) will guide Generative AI initiatives within the large enterprise C-Suite. They may already have the technical expertise and experience to understand the capabilities and limitations of Gen AI. They also have the authority and budget to make the necessary investments in infrastructure and talent to support Gen AI initiatives. Enterprise AI infrastructure is proven to be expensive to build, operate and maintain. That's why public cloud service provider solutions are often used for new AI use cases. AI Semiconductor Market Development Semiconductors designed to execute Artificial Intelligence (AI) workloads will represent a $53.4 billion revenue opportunity for the global semiconductor industry in 2023, an increase of 20.9 percent from 2022, according to the latest worldwide market study by Gartner. "The developments in generative AI and the increasing use of a wide range AI-based applications in data c

Demand for Quantum Computing as a Service

The enterprise demand for quantum computing is still in its early stages, growing slowly. As the technology becomes more usable, we may see demand evolve beyond scientific applications. The global quantum computing market is forecast to grow from $1.1 billion in 2022 to $7.6 billion in 2027, according to the latest worldwide market study by International Data Corporation (IDC). That's a five-year compound annual growth rate (CAGR) of 48.1 percent. The forecast includes base Quantum Computing as a Service, as well as enabling and adjacent Quantum Computing as a Service. However, this updated forecast is considerably lower than IDC's previous quantum computing forecast, which was published in 2021, due to lower demand globally. Quantum Computing Market Development In the interim, customer spend for quantum computing has been negatively impacted by several factors, including: slower than expected advances in quantum hardware development, which have delayed potential return on inve

Industrial Cloud Computing Apps Gain Momentum

In the manufacturing industry, cloud computing can help leaders improve their production efficiency by providing them with real-time data about their operations. This has gained the attention of the C-suite. Total forecast Industrial Cloud platform revenue in manufacturing will surpass $300 billion by 2033 with a CAGR of 22.57 percent, driven by solution providers enhancing platform interoperability while expanding partner ecosystems for application development. ABI Research found the cloud computing manufacturing market will grow over the next decade due to the adoption of new architectural frameworks that enhance data extraction and interoperability for manufacturers looking to maximize utility from their data. Industrial Cloud Computing Market Development "Historically, manufacturers have built out their infrastructure to include expensive data housing in the form of on-premises servers. The large initial upfront cost of purchasing, setting up, and maintaining these servers is