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Cloud services grow 31% in 2018, Amazon top vendor again

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The global infrastructure as a service (IaaS) market grew by 31.3 per cent in 2018 to $32.4 billion, up from $24.7 billion in 2017, with Amazon again emerging as the top vendor, followed by Microsoft, Alibaba, Google and IBM, a new report by Gartner Inc said on Tuesday.

“Despite strong growth across the board, the Cloud market’s consolidation favours large and dominant providers, with smaller and niche providers losing share,” Sid Nag, Research Vice-President at Gartner, said in a statement.

“It’s is an indication that scalability matters when it comes to the public Cloud IaaS business. Only those providers who invest in building data centres at scale across multiple regions will succeed and continue to garner the market share. Offering rich feature functionality across the Cloud technology stack will be the ticket to success, as well,” it said.

In 2018, five firms accounted for nearly 77 per cent of the global IaaS market, up from less than 73 per cent 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 per cent from 2017 to 2018 compared with the more modest growth of 11 per cent for all other providers during the same period.

Amazon continued to lead the IaaS market with around $15.5 billion revenue in 2018, up 27 per cent from 2017. It accounts for nearly half of the IaaS market and continues to expand into new IT markets via new services, as well as acquisitions, growing its core Cloud business.

Microsoft secured the second position in the IaaS market with revenue surpassing $5 billion in 2018, up from $3.1 billion in 2017. Microsoft delivers IaaS capabilities through open Microsoft Azure offering, which continues to solidify 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 per cent in 2018. The company has built an ecosystem comprising managed service providers (MSPs) and independent software vendors (ISVs).

Its success last year was driven by big 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.


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