There can only be one: Microsoft and Amazon square off for top IaaS, PaaS provider
- Sales favoring the cloud over hardware continued in 2017, represented in a market that continued substantial growth. At the end of Q4 2017, cloud services and infrastructure showed a 24% annual growth, according to a Synergy Research Report. IaaS and PaaS services grew at a 47% year-over-year rate while SaaS trailed behind at 31% year-over-year growth. Hosted private cloud services grew 30% year-over-year.
- Microsoft and Amazon still dominate the IaaS and PaaS market with around a 50% year-over-year revenue growth rate for Q3 2017. IBM and Rackspace were leaders in the hosted private cloud market and experienced a 30% revenue growth rate. Dell EMC remained a prominent player in both the public and private cloud segment for infrastructure hardware and software, demonstrating a revenue growth rate between 10% and 15% year-over-year.
- More than $100 billion in revenue for service providers came from cloud-based IaaS, PaaS, hosted private cloud services and enterprise SaaS. Supported services included email, social networking and Unified Communications as a Service (UCaaS).
The cloud market is more reflective of digital transformation than ever, and this is in part due to the cloud. Despite the opportunity for market expansion, the dominant players, Microsoft and Amazon, remain atop the market.
Microsoft is poised to reach a $1 trillion valuation by 2020, and in five years, almost half of Microsoft's overall revenue is expected to come from the Azure cloud. Microsoft's success in the cloud market is partially due to its trusted legacy in enterprise IT. But it remains behind the founding father of the cloud, AWS.
AWS holds about 44.2% of the market, followed by Microsoft's 7.1% in IaaS, according to Gartner. However, AWS will face inevitable "growth erosion" as rivals Microsoft, Google and Alibaba show exponentially higher annual growth rates.
The markets for infrastructure hardware and software are shrinking compared to the digital counterparts. HPE struggled to find its place in a modernizing market but emerged as the No. 2 enterprise vendor, eclipsed only by Cisco, while Dell EMC was well ranked for enterprise data center servers.
- Synergy Research Group 2017 Review Shows $180 billion Cloud Market Growing at 24% Annually
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