Despite the growing range of the cloud infrastructure market and the increasing number of vendors, Amazon Web Services has managed to retain its top spot.
Probably driven by its first mover advantage, the $25.65 billion brands have managed to hold sway on the cloud infrastructure market since 2006. Interestingly, for the first couple of years, it was the only player in the market. It must have been sheer foresight to ascertain how significant the cloud is going to become in the enterprise infrastructure space, and they stuck to this belief. Today, there is a mad scramble to enter the market, and the Asian giants Tencent and AliBaba are putting up a big fight with the IBMs, Microsoft, and Google of the world. Their focus is to offer differentiated products- and take a step ahead of AWS.
However, yet, no one has succeeded.
As forecasts from Gartner, the show cloud industry is slated to grow exponentially over the next 3 years, seeing a rate up from $182.4 billion in 2018 to 17.5 percent in 2019, touching a total $214.3 billion. Speaking on these figures, Sid Nag, research vice president at Gartner said, “Cloud services are definitely shaking up the industry. At Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organizations. What we see now is only the beginning, though. Through 2022, Gartner projects the market size and growth of the cloud services industry at nearly three times the growth of overall IT services.”
So, the Cloud Application Infrastructure Services (PaaS) is expected to double, between 2018 and 2022, from 15.6b $ to 31.8 b $. The cloud services industry will also see almost 50% growth, from 45.8 m $ to 61 b $. In fact, the total cloud market is showing signs of growing from 182.4 b $ to 331.2 b $.
The research also indicates that more than 35% of enterprises see the cloud as a major investment priority. At this rate, Gartner expects that by the end of 2019, more than 30 percent of technology providers’ new software investments will shift from cloud-first to cloud-only. This will also drive up SaaS and subscription-based cloud consumption models while license based infrastructure is set to fall.
“As cloud continues to become mainstream within most organizations, technology product managers for cloud-related service offerings will need to focus on delivering solutions that combine experience and execution with hyperscale providers’ offerings,” Nag added. “This complementary approach will drive both transformation and optimization of an organization’s infrastructure and operations.” Cloud is driving the overall infrastructure spending market, given that is the basic lay of digital transformation. Gartner actually predicts that in 2019, global IT spending will increase by 3.2 percent to $3.76 trillion. The X- as-a-service models will be fuelling everything from the data center to enterprise software.
Where the cloud goes, more technologies will follow.
The IaaS war has some clear winners- Amazon Web Services, Microsoft Azure, and Google Cloud Platform taking the top slot. But the advent of new technologies such as AI and ML could introduce new leaders over time. The hybrid spin will be dominant in the next few years now that IBM has acquired Red Hat.
AWS CFO Brian Olsavsky, speaking to analysts, “AWS maintained a very strong growth rate and continued to deliver for customers, 2018 was about banking the efficiencies of investments in people, warehouses, infrastructure that we had put in place in 2016 and ’17.” His company grew 45 percent in the fourth quarter — a position where it has been stable for the last year. The first quarter of 2019 saw Amazon’s profits – powered by AWS – at an annualized rate of over $30 billion. Amazon CFO also highlighted AWS’s customer wins for the quarter. They can boast of doing deals with Volkswagen, Ford, Lyft, and Gogo.
The cloud provider is today the market leader in infrastructure-as-a-service, a position it has maintained for over a decade. It is also moving up the stack to newer tech – from the IoT to AI, AR and Analytics. AWS is far more than a cloud infrastructure platform today.