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According to Synergy, there is very little movement on the cloud market leader board.
The firm released its third quarter analysis of cloud market and found that the top five performers, Amazon Web Services (AWS), Microsoft IBM, Google, and IBM, accounted for nearly 75 percent of global market.
This is bad news for everyone, even big-name cloud providers like Rackspace, Oracle, and Despite the revenue gains these smaller providers may have experienced, they still lack scale to compete with the leaders.
“Given the necessity for large scale, most cloud service providers are being forced to concentrate on market niches or particular geographic regions,” John Dinsdale, Chief Analyst at Synergy, stated in a prepared statement.
Market share growth was significantly faster for Microsoft, Google, and Alibaba than the overall market, Synergy at 45 percent.
Source: Synergy Group Out of all the data, Microsoft’s Azure cloud share grew most. Microsoft’s most recent earnings report indicated that Azure revenues increased 76 percent year-over-year. According to Synergy’s accounting this growth represented a 2.5 percent increase in Azure’s market share. This puts it at almost 15 percent.
Azure is still a distant second, but AWS, the long-standing market leader, has a market share just above 34 percent.
AWS revenues rose by only 46 percent in the latest quarter, a slower pace than Azure. Dinsdale said that this is just “the law of large number” and not a sign AWS will be losing its lead anytime soon.
It’s actually the opposite. AWS currently controls more market share than all four of its closest competitors combined.
Dinsdale stated that “you cannot keep growing at 100% when your business grows to a large scale.” Amazon is the market leader and role model for sustainable growth. The AWS year-on–year growth rate in these markets over the past ten quarters has been fairly steady at just under 50%.
Only IBM showed a slight dip in its market share among the leaders. Big Blue’s market share dropped by half to 7 percent, but Synergy noted its strength in “hosted private clouds services”. It will be interesting to see how IBM’s recent acquisition of Red Hat, especially in the hybrid cloud, will impact its standing.