Microsoft and Google Surge in Cloud but They Still Can’t Catch AWS

Microsoft and Google Surge in Cloud but They Still Can’t Catch AWS

Despite rivals reporting huge growth rates in their quarterly reports, Amazon Web Services (AWS), still holds a strong lead in the overall market for cloud infrastructure services.
This is the conclusion of two separate reports by Synergy and Canalys on the state of the cloud market. Both companies released their data at October’s end, completing a week of earnings releases by some of the top cloud service providers around the world, including AWS and Microsoft Azure, as well as Google Cloud Platform (GCP).
Global cloud market grew by around 40 percent in the third quarter. It earned a total of $12 billion (by Synergy) and $14 billion (by Canalys).
Both Azure and GCP reported dramatic year-over–year increases in their earnings reports. Google parent company Alphabet doesn’t break out GCP earnings in a separate line item. However, Canalys estimates GCP’s year-over–year growth at 76 per cent. Microsoft also reported that Azure’s business nearly doubled in year-over-year growth, with a 90 percent increase in the most recent financial period.
Year-over-year growth (%) among the top cloud infrastructure service providers in Q3 2017. Source: Canalys. Market leader AWS experienced a slower growth rate than its largest competitors at 42 percent. This tied its record for the smallest year-over–year increase in 10 quarters.
According to Synergy’s data, AWS is still the top cloud provider worldwide with a market share of around 40 percent. This is more than any of its five closest competitors.
“While we expect 40% growth in 2017’s total market, there’s still something a bit shocking about seeing AWS-sized businesses consistently growing their revenues by over 40%,” John Dinsdale (Synergy research director) said in a prepared statement.
The top cloud infrastructure service providers in Q3 2017 were competitively placed Source: Synergy. Despite AWS’ stubborn lead, it is safe to assume that Microsoft will remain its most serious competitor in the future quarters. Daniel Liu, Canalys research analyst, said that AWS will continue to enjoy its first-mover advantage and broadest cloud services portfolio. It also has strong awareness among developers. “But Microsoft’s significant growth, driven by its large enterprise installed base and compatibility with its Office suite, enhanced hybrid cloud solutions, and compatibility with its Office portfolio, means that it will remain AWS’ closest competitor.”
Dinsdale said that the opportunity for other providers to be upstarts is shrinking as the cloud infrastructure services market is largely dominated by AWS and Azure.
He stated that it was becoming more difficult for cloud providers to make an impact on market share rankings, as it is becoming increasingly difficult for them to do so.