Amazon, Microsoft, IBM And Google Growing 30 Percent Faster Than Next 20 Cloud Providers

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ANALYSIS: Amazon Web Services still remains “in a league of its own” though, according to latest Synergy Research Group statistics

I do not work on behalf of the Amazon Web Services (AWS) PR team. No one writing about *cloud* this side of technology does.

I know it must seem like we do sometimes because whenever it’s time to report the financials of Amazon Web Services it would seem AWS can do no wrong.

But I can assure you, dear reader, that I do try and report fairly. Just last month I was actually accused of sensationalising a story about the division, if you can believe such a thing.

AWS is huge

As a matter of fact, the AWS PR team is one of the quietest of them all. Which is surprising, seeing as on the back of Amazon’s latest quarterly results, AWS grew its revenue 58 percent, hitting revenue of $2.89 billion last week.

Or in other words, as stated today by Synergy Research Group, “Amazon is almost three times the size of its nearest competitor”.



That nearest competitor is Microsoft Azure, which itself grew its market share 100 percent year over year in the second quarter of 2016. Azure’s closest competitors, IBM and Google, grew at 57 percent and 162 percent year over year respectively. AWS actually grew just 53 percent, as measured by Synergy, which means its competitors are keeping up.

But what’s interesting out of all of this is that these four cloud providers are outpacing the next 20 cloud providers, by a large margin too. In aggregate, the big four grew their cloud infrastructure service revenues 68 percent in Q2, while the next 20 largest cloud providers, which include Alibaba, Rackspace, Salesforce, Oracle and HPE grew by 41 percent.

What’s a cloud to do?

netflixThe problem for the other, smaller players is their lack of global infrastructure, essentially. Microsoft, Google, and Amazon are all expanding their worldwide data centre operations, and IBM is surfing the wave of its SoftLayer division.

Of course, not all competitors are trying to catch up with AWS. Many of the other players offer different services specifically tailored to their customers (take Salesforce, which is actually a customer of AWS) but if the big four keep growing at this pace, there’s nothing stopping them providing many of these services themselves on their own cloud platforms.

Ways around this include the Oracle route of literally buying its cloud presence through a string of acquisitions. In fact, Oracle’s Larry Ellison himself has stated he wants to compete with Amazon. But still, it’s slow and costly.

“In a variety of ways Amazon and the other big three players have distanced themselves from the competition in this market and continue to widen the gap,” said John Dinsdale, chief analyst at Synergy Research Group.

“What marks them out as different is their global presence, marketing muscle, ability to fund huge investments in hyperscale data centers and, in most cases, a determination to succeed in the market. The ranking of the next 20 largest cloud providers features some interesting companies, with Alibaba and Oracle growing particularly strongly, but they are all starting from a long way behind Google, which is itself growing by well over 100 percent per year and yet remains only a sixth the size of Amazon.”

The original game plan for these ‘others’ was to pursue industry verticals and particular markets, something that IBM has done successfully to date with its cloud, but the flexibility of providers like Google or AWS is simply too enticing for any enterprise.

That, and the big four themselves are this year aggressively going after industry verticals themselves. Google has grown phenomenally and leadership under Diane Green will bear fruits for the foreseeable future as Google picks up customers across the consumer and enterprise world. Amazon Web Services is chucking out features like its IoT service, and Microsoft is getting ready to dish out Azure Stack so enterprises can run their own cloud.

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