Microsoft, Google start to do more than chip away at AWS' lead
- AWS lost 6% of its market share in the year leading up to Q4 FY2017, dropping down from 68% to 62%, according to KeyBanc analysts and reported by CNBC. Competitors Microsoft and Google absorbed this space, growing market shares to 20% and 12%, respectively, according to the analysts.
- Overall, Azure doubled to about $3.7 billion in FY2017 as AWS increased by 42%, according to the report. Analysts attributed Microsoft's growth to "more pre-built models than other public cloud vendors" that are globally available but predicted overall revenue growth to slow to 88% this year.
- On Tuesday, Google announced investment plans for the Google Cloud Platform in the form of five regions opening in 2018 and three submarine cables in 2019.
AWS' first press release of the year, announcing that Comcast named the No. 1 IaaS company its "preferred public cloud infrastructure provider," was quickly overshadowed by headlines touting its market share loss.
The market shares given by KeyBanc analysts differ from other estimates. Gartner estimates have AWS leading the market with a 44.2% share, followed by Microsoft at 7.1%, Alibaba at 3% and Google at 2.3%.
But no matter which estimates are more accurate, the fact that Amazon will undergo continued growth erosion in 2018 appears inevitable. Microsoft and Google have diversified and matured their cloud portfolios and are demonstrating strong growth.
Microsoft has established Azure as the backbone to its enterprise focus, and the cloud platform will be an integral asset as the company hones in on the $1 trillion valuation. Google, meanwhile, has set high expectations for the Google Cloud Platform and foresees cloud revenue reaching the profitability of its advertising arm.
Alibaba, that lurking Chinese giant, is eyeing the U.S. cloud market like a cat ready to pounce. If 2018 is the year it finally makes a big splash, AWS may be juggling too many competitors to keep up its historic growth.
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