Inside Advanced Scale Challenges|Wednesday, November 22, 2017
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AWS Dominates Soaring Cloud Market 

Despite intense competition in the booming cloud market, Amazon Web Services remains the overwhelming infrastructure-as-a-service leader by a wide margin, a cloud marker tracker concludes.

AWS is "in a league of its own," Synergy Research Group asserted in a market analysis released last week after top cloud vendors reported sterling third quarter results.

Synergy Research estimates that the overall cloud market, which it defines as infrastructure and platform services along with hosted private clouds, is growing by more than 40 percent annually. AWS (NASDAQ: AMZN) commands 35 percent of the market, and continues to gain market share. While cloud competitors such as Alibaba Group (NYSE: BABA), Google (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT) continue to boost revenues and market share at a faster pace than AWS, "the reality is that in this market Amazon remains bigger than its next five largest competitors combined," the market researcher asserted.

(Other cloud analysts peg Amazon's cloud market share closer to 30 percent, but note it still maintains a huge lead over Microsoft and other top competitors.)

Microsoft Azure remains the fastest growing cloud infrastructure provider, according to Synergy Research, with Google Cloud Platform and Alibaba not far behind. Meanwhile, IBM (NYSE: IBM) remains the third largest cloud infrastructure provider on the strength of its hosted private cloud services.

Quarterly revenue for AWS has soared since the third quarter of 2014, nearly quadrupling to $4.58 billion in the most recent quarter. While Microsoft's cloud computing service maintains a slightly higher run rate, much of its revenue is generated by software services rather than Azure, observers note.

Nevertheless, Microsoft stresses it has more cloud regions around the world than its competitors. Based on third quarter results, another cloud tracker, Canalys, noted that Microsoft's cloud business is growing at a 90 percent clip while Google's is rising at a 75 percent rate.

Microsoft announced a multi-year partnership on Monday (Oct. 30) with Chevron (NYSE: CVX) in which the energy giant will use Azure as its primary cloud service as it moves its upgrades its oil field operations. Chevron said it would use Azure to support new applications ranging from data analytics to the Internet of Things.

"Microsoft and Google too deserve plaudits for the growth rates they are achieving, while IBM is gaining market share in its sweet spot of hosted private cloud services," John Dinsdale, chief analysts at Synergy Research Group, noted in a statement. "It is becoming increasingly difficult for cloud providers outside of the leading pack to make an impression on the market share rankings."

Oracle (NYSE: ORCL), which has made an aggressive push into cloud services, "continues to grow strongly, albeit from a small base," Synergy Research reported. Salesforce (NYSE: CRM) and Rackspace remain key players in niche cloud markets, the market analyst said.

The quarterly revenue reports from AWS and others underscore the steady growth of cloud infrastructure services as enterprises large and small move to the cloud and hedge their bets with multi-cloud deployments aimed at avoiding vendor lock-in. Synergy Research estimated that quarterly cloud services revenues have reached $12 billion.

About the author: George Leopold

George Leopold has written about science and technology for more than 25 years, focusing on electronics and aerospace technology. He previously served as Executive Editor for Electronic Engineering Times.

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