Spending on cloud infrastructure services continues to increase with Amazon Web Services (AWS) and Microsoft accounting for half of all customer investments.
According to Synergy Research findings, second quarter spend “jumped” 39 per cent year-on-year, with AWS maintaining pace with a 33 per cent worldwide market share.
“In line with expectations this growth rate is nudging down each quarter, reflecting the increasingly massive scale of the market,” observed John Dinsdale, chief analyst at Synergy Research.
In terms of actual dollars spent on cloud services however, Dinsdale said the market grew by over $1.6 billion from the previous quarter, making it the second highest incremental increase ever achieved.
And despite encouraging numbers from the next four competitors - Microsoft, Google, Alibaba and Tencent - in aggregate, AWS is still bigger than those four combined.
Four other cloud providers are among the market leaders but according to Dinsdale, growth rates are lower due to the vendors being more "niche oriented", in the form of IBM, Salesforce, Oracle and Rackspace.
“Amazon is maintaining its leadership position in the market though growth at Microsoft is also noteworthy,” Dinsdale said. “In early 2016 Microsoft was less than a quarter the size of Amazon in this market, while today it is getting close to being half the size.
“These two cloud providers alone account for half of all money spent on cloud infrastructure services, which is impressive for such a high-growth, strategically important market.”
Given most of the major cloud providers having now released earnings data for the second quarter, Synergy estimates that quarterly cloud infrastructure service revenues - including IaaS, PaaS and hosted private cloud services - stands at almost $23 billion, with revenues for the last four quarters now reaching "well over $80 billion".
Public IaaS and PaaS services account for the bulk of the market and those grew by 42 per cent in Q2.
In public cloud, Dinsdale said the dominance of the top five providers is "even more pronounced", as they control over three quarters of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.
“Revenues from cloud infrastructure services have almost hit the $100 billion per year run rate, and there is no end in sight to strong growth,” Dinsdale added. “When quarterly spend on cloud services is mapped out for the last twelve quarters, we are pretty much looking at a steep, straight line growth profile.”