Report Shows Amazon Web Services Ruling IaaS Market

Microsoft Azure a distant No. 2, but still with solid growth.

It's no surprise to anyone in the IT industry that cloud growth is exploding. What may be a surprise, however, is how large a lead Amazon Web Services (AWS) has in the space.

Newly released data from Gartner Inc. shows that the global public cloud-based IaaS market raked in $22.1 billion throughout 2016, a 31 percent jump from 2015.

IaaS also outpaced the other "as a service" categories -- namely Platform as a Service (PaaS) and Software as Service (SaaS) -- and will continue to do so in the next five years, according to Gartner research director Sig Nag.

"The demand for cloud-based IaaS continues on its path of aggressive growth, and the high growth of IaaS is also driving growth in related cloud markets," Nag said.

AWS was the runaway leader in the public IaaS space in 2016, based on Gartner's measurements, with a global market share of 44 percent.

[Click on image for larger view.] IaaS public cloud services market shares, 2015-2016, with revenues in millions of U.S. dollars. (Source: Gartner)

Gartner attributed AWS' dominance to its ability to accommodate "the broadest range of use cases," ranging from born-in-the-cloud startups, to businesses in the middle of transitioning their operations to the cloud, to large enterprises.

Azure came in at a very distant No. 2 with 7 percent of the market, although its year-over-year growth (61 percent) did exceed that of AWS (46 percent). Gartner credited Microsoft's ongoing investments in IaaS capabilities, as well as its "solid sales and marketing execution."

Coming in at No. 3 was China-based Alibaba, edging out Google. Though Alibaba only secured 3 percent of the global public IaaS market in 2016, it was propelled by stratospheric 127 percent year-over-year growth. Fourth-place Google also recorded impressive year-over-year growth in 2016, essentially doubling its cloud earnings, but owned just over 2 percent of the global market.

Gartner expects AWS to "witness growth erosion in share" over the coming years as other hyperscale platforms make advances in their service offerings.

About the Author

Gladys Rama (@GladysRama3) is the editorial director of Converge360.


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