The IaaS cloud market grew 29.5% in 2017 compared to 2016.
Published2018.08.02 08:47Amazon dominates, while Microsoft doubles its growth year-over-year.
The Infrastructure as a Service (IaaS) market, which allows users to use ICT resources like servers, storage, and software as a service (as a service) over the Internet when needed, rather than purchasing them, is growing by the day. IaaS leverages virtualization technology in cloud computing to charge users for computing services like CPUs and memory, storage services for storing and managing data, and network services for communication between distributed application software.
Gartner reported that the global IaaS market size, which was $18.2 billion in 2016, reached $23.5 billion in 2017, recording an annual growth rate of 29.5%.
According to Gartner, Amazon was the leader in the IaaS market in 2017, followed by Microsoft, Alibaba, Google, and IBM.
“The top four providers offer strong IaaS solutions and have seen robust growth as well-known enterprises actively adopt their IaaS offerings and cloud availability expands into new regions and countries,” said Sid Nag, research director at Gartner. “Cloud-driven IT spending now accounts for more than 20% of the total IT budgets of cloud users, many of whom are using the cloud to support their production environments and business-critical operations.”
The competitive landscape of the IaaS market is consolidating around the top companies. The top four companies—Amazon, Microsoft, Alibaba, and Google—all offer hyperscale IaaS, accounting for approximately 73% of the overall IaaS market and 47% of the combined IaaS and Infrastructure Utility Services (IUS) market.
| Company name | 2017 Sales (million dollars) | 2017 Market share (%) | 2016 Sales (million dollars) | 2016 Market share (%) | 204, 204, 204); width: 100px;"> 2016-2017|
| Amazon | 12,221 | 51.8 | 9,775 | 53.7 | 25.0 |
| Microsoft | 3,130 | 13.3 | 1,579 | 8.7 | 98.2 |
| Alibaba | 1,091 | 4.6 | 670 | 3.7 | 62.7 |
| 3.3 | 500 | 2.7 | 56.0 | ||
| IBM | 457 | 1.9 | 297 | 1.6 | 53.9 |
| etc | 5,902 | 25.0 | 5,392 | 29.6 | 9.5 |
| aggregate | 23,580 | 100.0 | 04, 204);">18,213100.0 | 29.5 |
Amazon became the global leader in the IaaS market in 2017, achieving $12.2 billion in revenue, a 25% increase year-over-year. As the largest IaaS provider, Amazon offers the most mature enterprise IaaS offering, boasting numerous customer success stories and a robust partner ecosystem. The growth in 2017 was driven not only by customers migrating their existing data centers to cloud IaaS but also by customers pursuing innovative digital business projects, reflecting a broad range of use cases.
Microsoft ranked second in the IaaS market, achieving over 98% growth in its IaaS solutions and generating over $3.1 billion in annual revenue. Microsoft provides IaaS capabilities through its Microsoft Azure solution, which combines infrastructure and platform services.
Alibaba, ranked third, achieved a 63% growth rate in 2017, driven by its successful investment in R&D. The fact that Alibaba has the financial capacity to sustain this trend and invest in global expansion suggests that it could potentially replace global hyperscale cloud providers in some regions.
“The purpose and way in which companies consume technology is fundamentally changing,” he said. “The combined IaaS and IUS market is being impacted as some legacy infrastructure offerings, such as IUS, lose their share,” he said. “Furthermore, the surge in demand for cloud professionals is forcing technology companies to change the way they compete.”
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