Information Center

In the first quarter of 2016, the cloud infrastructure market exceeded $7 billion

  

According to a recent report released by Synergy Research, the overall cloud infrastructure market expanded by 50% in the first quarter of 2016, with revenue of $7 billion.

The four major suppliers are AWS, Microsoft, IBM and Google. The growth rate of these four suppliers is higher than that of the overall market, and even the growth of other competitors compared with other industries is amazing.

"This is a huge market with very rapid growth. Some companies may increase by 10% - 30% every year. They may feel good about themselves, but they are losing market share," John Dinsdale, chief analyst and research director of Synergy, wrote in the report.

Synergy divides infrastructure as a service, platform as a service, private cloud, and hybrid cloud vendors into four different layers, with each layer accounting for about 20% - 30% of the market share.

There is only one top tier (accounting for 31% of the market share): Amazon Web Services, "outshining other followers". Dinsdale said that AWS grew 57% year on year.

The other three giants Microsoft, IBM and Google occupy the second tier.

According to Synergy's description, "these three huge followers" control a total of 22% of the transportation market share. However, these manufacturers are expanding their business at a faster rate than any other manufacturers, with a total year-on-year growth rate of 93% in the first quarter.

Microsoft and Google doubled their revenues in a year, "so they are at least slowly winning a place to become market leaders," Dinsdale said.

At the third layer, there are 20 cloud providers of different scales, including Alibaba, CenturyLink, Fiji, HPE, NTT, Oracle, Rackspace, Salesforce and VMware.

In general, the 20 companies accounted for about 27% of the market share in the first quarter, with an overall growth rate of 41% - which means that in a market with a market growth rate of more than 50%, most of them lost market share, Dinsdale pointed out.

On the next level, the overall market share is less than 20%, covering all other manufacturers.

Although many of these companies are regional companies or very segmented companies, there are still some innovative cloud providers. "They still have the enthusiasm to compete with the four major manufacturers," Dinsdale said. But at some levels, scale is a problem for them.

In addition to market growth, "a big problem for them is whether their business can be sustainable and profitable," Dinsdale pointed out in the report.

"They can solve this problem by focusing on regions or specialized services, but a huge market requires huge scale, extensive coverage, deep financial strength and long-term enterprise focus," he said.

Third Eye Consulting is a solution provider in San Francisco, and also a partner of AWS, Microsoft, Google and IBM. Dj Das, the founder and CEO of the company, said that opportunities for these four manufacturers are huge.

"The good thing at the moment is that all these companies are doing this, and they enable enterprises to migrate to the cloud," said Das. "This market is growing for everyone because these changes are beginning to happen."

Through communication with enterprise customers, he believes that the growth of the cloud market will continue for a long time. In the past five years, people's views have changed dramatically, especially the application of cloud in Asia. He saw some recent projects that will boost global growth.

Amazon absolutely has the first mover advantage. Das said that many popular software ecosystems are designed for easy integration with the Amazon platform.

But Amazon has not invested in improving its infrastructure at the same speed as some other newcomers recently. If the leader is too comfortable, Microsoft or Google may catch up with it in the future this year.