Global IaaS Public Cloud Services Market Developed Nearly 40.7% Last Year

Gartner reveals that Amazon, Microsoft, and Alibaba led the steady race to the public cloud services in 2020.

Given the continuous rush towards digitization, the hyperscale technology providers are persistent in shaping distributed cloud and edge solutions. This is to extend the public cloud’s reach within private and on-premise locations while addressing the evolving needs of organizations.

It is primarily related to data sovereignty, workload portability, and network latency. As a result, the global infrastructure as a service (IaaS) market value grew almost 40.7% in 2020 – accounting for a total of $64.3 billion. This is up from $45.7 billion in 2019, reveals a recent Gartner study.

Sid Nag, research vice president at Gartner, cited – “This fact, coupled with reliance on the public cloud services by a majority of organizations during the pandemic, drove another year of double-digit market growth in 2020.” Amazon topped the list of IaaS market last year, followed by Alibaba, Microsoft, Google, and Huawei.

Also Read: Public Cloud End-User Spending in India to Reach $4.4 Billion in 2021

According to the statistics, the top five IaaS providers held nearly 80% of the overall market, and almost 90% of IaaS providers exhibited growth. Moreover, Amazon continued to lead the worldwide IaaS market category with nearly $26.2 billion of revenue in 2020, which is 41% market share.

Basically, Amazon’s 28.7% growth was somewhat slower than that of the extensive market, with their sales growth fundamentally reflecting increased customer usage. Microsoft owned the following position with approximately 60% growth – touching almost $12.7 billion in revenue.

During the pandemic era, the global healthcare crisis and economic disruption among workplace ecosystems drove heightened demand from existing Microsoft Azure consumers. This was mainly to migrate mission-critical workloads like healthcare applications with AI-assisted bots, e-commerce in retail, and digital twins in manufacturing.

In China, the predominant IaaS provider, Alibaba, grew around 52.8% in 2020, with revenue surpassing $6 billion – up from $4 billion year-over-year. In fact, the company observed its highest growth rate in the education vertical at 105%.

It was driven by downloads of Alibaba’s enterprise communication as well as collaboration platform DingTalk – majorly among employees and students, working and studying from home, respectively. Even Huawei stepped into the top five IaaS vendors for the first time in 2020 – after its second consecutive year of more than 200% growth in the IaaS market with about $2.7 billion in revenue.

Over 90% of its revenue comes from Greater China, and this region continues to see accelerated cloud market growth. After 2019, the Chinese company made a hard pivot away from selling devices to investing heavily into the public cloud services business that is yielding results.

Also Read: New Study Reveals 72% Of Enterprises Pivoted From Public Cloud To On-premises

Furthermore, Google’s IaaS revenue matured around 66% to reach almost $4 billion. Spending from the government, retail, and healthcare sectors helped fuel the tech giant’s growth in the market amid the pandemic. It is similar to their focus on supporting the development as well as deployment of cloud applications – for both hybrid and multi-cloud models.

To conclude, Sid Nag continued, “The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over…While the cloud market will continue to grow, the real opportunity for providers comes from growth in cloud-adjacent technology markets such as edge, 5G, and AI, as CIOs look to invest in technologies that address their complex and emerging use cases.”