- Amazon Web Services remains the largest global provider of IaaS public cloud services, maintaining growth alongside its vast scale. AWS brought in $26.2 billion in IaaS public cloud services revenue last year, accounting for 40.8% of the global market share, according to Gartner data released Monday. The overall market grew 40.7%, reaching $64.3 billion in revenue.
- AWS maintains more than double the market share of Microsoft, its next closest competitor. Microsoft earned $12.7 billion in the segment last year and accounted for 19.7% of the market, Gartner found. Alibaba, dominant in China, represents the third-largest global provider of IaaS public cloud services, and maintains 9.5% of the market.
- An uptick in sales across clouds is chipping away at AWS's market share, which has dipped over the years. Cloud sales growth stems primarily from customer usage, according to Gartner. Huawei commanded the most significant growth in 2020, up 202.8% from 2019 revenues of $882 million to reach $2.7 billion in 2020. It's the second consecutive year Huawei had more than 200% growth, which edged it into the top five providers this year.
IaaS public cloud market share, 2019-2020
Company Market share, 2019 Market share, 2020 Revenue growth, 2019-2020 Amazon 44.6% 40.8% 28.7% Microsoft 17.4% 19.7% 59.2% Alibaba 8.8% 9.5% 52.8% 5.2% 6.1% 66.1% Huawei 1.9% 4.2% 202.8% Others 22.1% 19.8% 25.6%
The slide in AWS's market share over time signals the maturity of the cloud market. But even amid this decline — AWS held 49.4% of the market share in 2017 — the company remains by far the dominant provider. But the other clouds are, and have been, chipping away at its lead, and more customer adoption leads to higher growth rates than Amazon can maintain at its size.
The growth of one provider doesn't necessarily erode that of others. Rather, customers are using more cloud services, which has a direct impact on a provider's revenue gains. End user spending in public cloud is forecast to grow 23.1% this year, expected to reach $332.3 billion in 2021, according to Gartner. SaaS is driving the bulk of spending, but IaaS is not far behind, forecast to this year reachreach of $122.6 billion and $82 billion, respectively.
Between 2019 and 2020, Microsoft grew 59.2% and Google grew 66.1%, though each boasts significantly less revenue when compared to Amazon. Google, considered the No. 3 U.S. cloud provider, earned $3.9 billion in IaaS public cloud revenue last year, just 15% of AWS's 2020 revenue.
The public cloud IaaS market is healthy overall, with 90% of providers growing. The top five providers account for 80% of the total market revenue, according to Gartner.
As the public cloud market has matured, it has become less about one cloud over another. Rather, companies are making adoption decisions on more than just the underlying technology.
Feature parity is one thing, but there are more elements to market share gain, according to Sid Nag, research vice president at Gartner. Companies are factoring in how a cloud provider approaches customers from a customer sales perspective, partner ecosystem programs, digital initiatives, and strategic relationships with other vendors such as edge or telco providers.
Appealing to specialized workloads, more vendors are tailoring capabilities to different sectors, from financial services to healthcare.
The trend is buoyed by companies moving complex workloads into the clouds, which creates a greater need for more industry-focused clouds, according to Nag. "It's not necessarily that you have to offer a separate industry cloud," so long as a provider supports the requirements and mandates of a particular industry.
Google's IaaS revenue was supported by spending in retail, government and healthcare sectors, along with its efforts to emphasize hybrid and multicloud, according to Gartner. Microsoft benefited from increased demand from existing Microsoft Azure customers migrating critical workloads to a cloud environment.
As cloud providers specialize for more requirement-heavy customers, they are also moving to support edge solutions, according to Nag. Industry will see more cloud traction across the spectrum and technology stack, as organizations move beyond the public cloud into areas such as edge, 5G or AI.