Gartner reports 31.3% global IaaS market growth in 2018
The global infrastructure as a service (IaaS) market grew 31.3% last year to reach US $32.4 billion, according to Gartner’s latest market share data.
Currently, Amazon, Microsoft, Alibaba, Google and IBM dominate the market — earning 77% of the total revenue and experiencing 39% aggregate growth in 2018 — while smaller and niche providers only nabbed 23% of the revenue and saw 11% aggregate growth in the same period.
Gartner Research Vice President Sid Nag said the large providers’ high growth rate and consolidation in the cloud market was likely due to their IaaS solutions’ scalability — where “consolidation will occur as organisations and developers look for standardised, broadly supported platforms for developing and hosting cloud applications”.
As a result, these providers are expected to see more growth in 2019, while smaller and niche providers will continue to lose market share.
Of the IaaS providers, Amazon trumped the worldwide market, earning almost US$15.5 billion in 2018 — nearly half the market’s total revenue. While it only grew by 26.8% last year, it continues to expand into new IT markets via new services and acquisitions while growing its core cloud business.
Microsoft — which delivers its IaaS capabilities through Microsoft Azure — came in at number two, earning just over $5 billion in 2018 and experiencing 60% growth.
While Alibaba Cloud experienced the highest growth among leading vendors, growing 92.6% in 2018, its $2.5 billion earnings put it in third place. The company — which is the dominant IaaS provider in China — has built an ecosystem of managed service providers (MSPs) and independent software vendors (ISVs). Gartner believes Alibaba’s 2018 success was driven by increased investment in research and development. Alibaba has the financial capacity to continue growing and invest in global expansion.
Google took the number four spot, earning $1.3 billion and growing 60.2% in revenue in 2018.
However, “Google’s cloud offering is something to keep an eye on with its new leadership focus on customers and shift toward becoming a more enterprise-geared offering,” Nag said.
“As the cloud business continues to gather momentum and hyperscale cloud providers consolidate the market, product managers at cloud MSPs must look at other ways to differentiate, such as focusing on vertical industries and getting certified in the hyperscale cloud provider partner programs in order to drive revenue,” he concluded.
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