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In 2018, the top five IaaS providers accounted for nearly 77% of the global IaaS market, up from less than 73% in 2017. Market consolidation will continue through 2019, driven by the high rate of growth for the top providers, which experienced aggregate growth of 39% from 2017 to 2018 compared with the more modest growth of 11% for all other providers during the same period. “Consolidation will occur as organizations and developers look for standardised, broadly supported platforms for developing and hosting cloud applications,” said Mr Nag.
Amazon continued to lead the worldwide IaaS market with an estimated $15.5 billion of revenue in 2018, up 27% percent from 2017 (see Table 1). The largest of the IaaS providers, Amazon accounts for nearly half of the total IaaS market. It continues to aggressively expand into new IT markets via new services, as well as acquisitions, growing its core cloud business.
Microsoft secured the No. 2 position in the IaaS market with revenue surpassing $5 billion in 2018, up from $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its innovative and open Microsoft Azure offering, which continues to solidify its position as a leading IaaS provider.
The dominant IaaS provider in China, Alibaba Cloud, experienced the strongest growth among the leading vendors, growing 92.6% in 2018. The company has built an ecosystem consisting of managed service providers (MSPs) and independent software vendors (ISVs). Its success last year was driven by aggressive R&D investment in its portfolio of offerings, especially compared with its hyperscale provider counterparts. Alibaba has the financial capability to continue this trend and invest in global expansion.
Google came in at the No. 4 spot, growing 60.2% in revenue from 2017. “Google’s cloud offering is something to keep an eye on with its new leadership focus on customers and shift toward becoming a more enterprise-geared offering,” said Mr Nag.
“As the cloud business continues to gather momentum and hyperscale cloud providers consolidate the market, product managers at cloud MSPs must look at other ways to differentiate, such as focusing on vertical industries and getting certified in the hyperscale cloud provider partner programmes in order to drive revenue,” said Mr Nag.
