Amazon Dominates a Growing Cloud Computing Market

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Some major technology companies have a lot of ground to cover if they want to catch up with Amazon’s cloud.

Synergy Research Group revealed that during the third quarter of 2013, Amazon’s AWS infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) cloud services suite raked in over $700 million. The firm notes that even combined, Microsoft, IBM, Google and Salesforce still lag 15 percent behind the market leader with just over $600 million.

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There are signs that the competition is barely putting a dent in AWS. “In a worldwide market that grew 46 percent from Q3 of 2012, Amazon grew by 55 percent and increased its overall market share,” said Synergy in a statement.

“While Amazon dwarfs all competition, the race is on to see if any of the big four followers can distance themselves from their peers,” said Synergy Research Group managing director John Dinsdale, in company remarks.

For Amazon’s rivals, there is a silver lining. The cloud market shows little signs of slowing down.

“The good news for these companies and for the long tail of operators with relatively small cloud infrastructure service operations, is that IaaS/PaaS will be growing strongly long into the future, providing plenty of opportunity for robust revenue growth,” added Dinsdale.

The worldwide IaaS/PaaS market crossed a big milestone last quarter. Cloud providers generated $2.5 billion during the third quarter. IaaS beat out PaaS by attracting 64 percent of sales. On a year-on-year basis, content delivery network (CDN) revenues grew 14 percent, retail colocation grew 8 percent and managed hosted grew 3 percent, according to the firm.

Last year, Gartner forecast that the PaaS market would reach $2.9 billion in 2016 from $900 million on 2011. Comments by Gartner research director Fabrizio Biscotti shed light on why IaaS is outpacing PaaS.

“Of all the cloud technological aspects, infrastructure as a service (IaaS) and software as a service (SaaS) are the most mature and established from a competitive landscape perspective, while PaaS is the least evolved,” said Biscotti in a statement.

While it trails, PaaS’s significance to the cloud computing market cannot be overstated. “PaaS technologies are embedded in many other types of cloud services — all major opportunity channels. The direct revenue in the PaaS market grossly underestimates the importance of this part of the cloud architecture,” said Gartner distinguished analyst Yefim Natis.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.

Photo courtesy of Shutterstock.