Amazon Enjoys Comfortable Lead in the Cloud Infrastructure Services Market

Amazon’s competition is growing at a rapid clip. Yet, despite their progress, it may be a long while before the company’s rivals unseat the cloud-computing giant.

Amazon Web Services (AWS) spent the second quarter (Q2) of 2016 comfortably perched atop the cloud infrastructure services market, according to the latest data from Strategy Analytics. The cloud infrastructure services category includes the infrastructure as a service (IaaS), platform as a service (PaaS) and hosted private cloud segments.

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During the quarter, the market grew a staggering 51 percent year-over-year, crossing the $8 billion mark in quarterly revenues and nearly generating $28 billion in sales for the 12-month period ending June 30, said the research group.

AWS claimed over 30 percent of the market, with a year-on-year growth rate of 53 percent. Microsoft was a distant second with just over 10 percent of the market, despite a feverish growth rate of 100 percent. IBM took third place and Google came in fourth, growing at a rate of 57 percent and 162 percent respectively.

“Amazon/AWS remains far ahead and in a league of its own, despite some valiant efforts from the other big three cloud providers,” said John Dinsdale, chief analyst and research director at Synergy Research Group, in an email to Datamation. “Microsoft and Google continue to achieve triple-digit growth rates and IBM too is growing rapidly; but Amazon’s worldwide market share remains well over 30 percent and is considerably larger than its three closest competitors combined.”

AWS is generating both increased sales and profits for the ecommerce giant. Last week, during an earnings conference call, Amazon executives revealed that AWS had generated $2.9 billion in revenue during the second quarter, a 58-percent improvement. “Amazon Web Services’ operating income was $718 million, a 24.9-percent operating margin compared with $305 million in the prior year,” said Amazon’s CFO, Brian T. Olsavsky, during the call.

Essentially, the top four providers have the resources to capitalize on the explosive worldwide demand for enterprise cloud services.

“What marks them out as different is their global presence, marketing muscle, ability to fund huge investments in hyperscale data centers and, in most cases, a determination to succeed in the market,” Dinsdale said in a statement. “The ranking of the next 20 largest cloud providers features some interesting companies, with Alibaba and Oracle growing particularly strongly, but they are all starting from a long way behind Google, which is itself growing by well over 100 percent per year and yet remains only a sixth the size of Amazon.”

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

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