The global public cloud Infrastructure-as-a-Service (IaaS) market grew 29.5 percent in 2017 to total $23.5 billion, up from $18.2 billion in 2016, according to a new Gartner report. AWS was the No. 1 vendor in the Public Cloud IaaS market in 2017, followed by Microsoft, Alibaba, Google and IBM.
In the Public Cloud IaaS market, the competitive landscape is consolidating around the leaders. The top four providers – AWS, Microsoft, Alibaba and Google – are all hyperscale IaaS providers and represent approximately 73 percent of the total IaaS market. AWS is the clear leader in the worldwide IaaS market with an estimated $12.2 billion revenue in 2017, up 25 percent from 2016. The largest of the Public Cloud IaaS providers, Amazon AWS would also be the most mature, enterprise-ready provider, with the strongest track record of customer success and the most useful partner ecosystem (ed., at least, that’s what Garter says).
Growth in 2017 was driven not only by customers that are migrating from traditional data centers to public cloud IaaS, but also by customers implementing “transformational digital business projects, reflecting its broad range of use cases.”
Microsoft has secured the No. 2 position in the Public Cloud IaaS market with growth of more than 98 percent on its Cloud IaaS offering, with revenue surpassing $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its Microsoft Azure offering, which is a collection of infrastructure and platform services.
“The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organizations and as cloud availability expands into new regions and countries,” said Sid Nag, research director at Gartner. “Cloud-directed IT spending now constitutes more than 20 percent of the total IT budget for organizations using cloud. Many of these organizations are now using cloud to support production environments and business-critical operations.”
In the third spot, Alibaba’s 2017 growth of 63 percent would reflect the company’s successful investment in research and development (R&D). Alibaba would have the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to the global hyperscale cloud providers in select regions.
“This reflects a fundamental change in what and how organizations are consuming technology. Some legacy infrastructure offerings, such as IUS, are seeing lower and slower uptake that impacts the combined IaaS and IUS market,” added Mr. Nag. “Additionally, a groundswell of demand for cloud-skilled personnel is forcing technology providers to change how they compete to meet this exploding demand.”
Gartner clients can learn more about these findings in the report “Market Share Analysis: IaaS and IUS, Worldwide, 2017.”
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