Aus public cloud market grows by 40% as providers add regional capabilities

The Australian infrastructure-as-a-service (IaaS) public cloud services market grew 40.4% in 2020 to more than $1.4 billion in total revenue, according to latest research by Gartner. Amazon retained the first position, followed by Microsoft and Google.

“Australian organisations accelerated their commitment to public cloud in 2020 and are now investing to support new opportunities in 5G, cloud-native applications, AI and data analytics,” said Michael Warrilow, Research Vice President at Gartner.

“Leading cloud providers continue to invest locally to overcome the tyranny of distance,” Warrilow said.

“It’s no longer just about Sydney or Canberra. They are adding new regional capabilities spanning from Perth in our west, Auckland in the east, Jakarta and Kuala Lumpur to our north and Melbourne in the south-east.”

In 2020, the top five IaaS providers — Amazon, Microsoft, Alibaba, Google and Huawei — accounted for 80% of the global Iaas market, and nearly 90% of all IaaS providers exhibited growth globally.

Amazon continued to lead the global IaaS market with $26.2 billion of revenue in 2020 and 41% market share. Amazon’s 28.7% growth was slightly slower than that of the market, with its sales growth primarily reflecting increased customer usage.

Microsoft maintained the second position in Gartner’s IaaS market share with nearly 60% growth, reaching US$12.7 billion in revenue in 2020. The global healthcare crisis and disruption in workplace environments during the pandemic era drove increased demand from existing Microsoft Azure customers to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail.

The dominant IaaS provider in China, Alibaba, grew 52.8% in 2020 with revenue surpassing $6 billion, up from $4 billion in 2019. In 2020, Alibaba saw its highest growth rate in the education vertical at 105%, driven by downloads of Alibaba’s enterprise communication and collaboration platform, DingTalk, among employees and students working and studying from home.

After its second consecutive year of over 200% growth in the IaaS market, Huawei broke into the top five IaaS vendors for the first time in 2020, with $2.7 billion in revenue. Over 90% of this revenue comes from Greater China, a region that continues to see rapid cloud market growth.

Google’s IaaS revenue grew 66% to reach nearly US$4 billion in 2020. Spending from the retail, government and healthcare sectors helped drive Google’s growth in IaaS in 2020, as did its focus on supporting the development and deployment of cloud applications in both a hybrid and multicloud model.

Image credit: ©stock.adobe.com/au/bagotaj