How Amazon Took (and Kept) the IaaS Crown

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Amazon is the undisputed cloud company and for a good reason.

In its latest review of the infrastructure as a service (IaaS) public cloud services market for 2016, Gartner concluded that Amazon Web Services claimed and maintained the number one spot thanks to some good old fashioned mass-market appeal. Demand for Amazon’s cloud services cuts across all types of businesses and use cases.

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“Amazon is the clear leader in the IaaS market with 44.2 percent of the market,” noted the market research firm in a Sep. 27 announcement. Last year, the company generated nearly $9.8 billion in IaaS revenue.

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“Amazon has achieved this position by serving the most customers across the broadest range of use cases — from cloud-native startups, to midmarket businesses wanting to lift and shift traditional applications, to enterprises executing transformational migrations to the cloud,” continued Gartner.

In June, Amazon was named a leader in Gartner’s IaaS Magic Quadrant for the seventh consecutive year. Microsoft was the only other company to share the leaders quadrant with Amazon.

Microsoft is a distant second but it’s growing quickly. Last year, the Redmond, Wash. software and cloud provider nabbed 7.1 percent of the market with IaaS sales of nearly $1.6 billion. In 2015, Microsoft hadn’t even crossed the $1 billion mark.

China’s Alibaba took third place with three percent of the market and revenue of $675 million. Google and Rackspace round out the top five, each with market shares of just above two percent and revenues of $500 million and $484 million, respectively.

Taken altogether, the world’s cloud companies generated over $22 billion in IaaS sales last year, a 31-percent increase compared to 2015.

“The market for cloud services is growing faster than virtually every other IT market today, with much of this growth coming at the expense of the traditional, non-cloud offerings. The demand for cloud-based IaaS continues on its path of aggressive growth, and the high growth of IaaS is also driving growth in related cloud markets,” said Gartner research director Sid Nag, in a statement.

Other categories are quickly gaining momentum, but IaaS is set to outpace them all, predicted Nag. “While platform as a service (PaaS) and software as a service (SaaS) are also exhibiting strong growth, IaaS is expected to show the fastest growth over the next five years.”

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