New Q2 data from Synergy Research Group shows that spend on cloud infrastructure services jumped 50% from the second quarter of 2017. This was virtually in line with the growth rate achieved in the first quarter and was once again comfortably higher than growth rates achieved throughout 2017. Revenue growth at Microsoft, Google and Alibaba far surpassed overall market growth rate, so all three gained market share, but market leader Amazon maintained its dominance as its market share nudged up a percentage point to 34%. It remains bigger than its next four competitors combined. As these four cloud providers increase their grip on the market, it is the small-to-medium sized cloud operators who collectively have seen their market shares diminish; among the top 25 cloud providers, only three other companies have seen their market share increase significantly, though none of the three has yet broken through the 1% market share threshold. Meanwhile IBM market share has been relatively stable at around 8%, thanks primarily to its strong leadership in hosted private cloud services.
With most of the major cloud providers having now released their earnings data for Q2, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) are now comfortably over $16 billion. The Q2 growth rate of 50% compares with a full-year 2017 growth rate of 44% and a 2016 growth rate of 50%. Public IaaS and PaaS services account for the bulk of the market and those grew by 53% in Q2. In public cloud the dominance of the top five providers is even more pronounced, as they control almost three quarters of the market. Geographically, the cloud market continues to grow strongly in all regions of the world,
“Well, they’ve done it again,” said John Dinsdale, a chief analyst at Synergy Research Group. “Amazon Web Services and its three main challengers all turned in some exceptional growth numbers in the quarter. Collectively those four firms alone accounted for well over three quarters of the sequential growth in cloud service revenues. In a large and strategically vital market that is growing at exceptional rates, they are throwing the gauntlet down to their smaller competitors by continuing to invest enormous amounts in their data center infrastructure and operations. Their increased market share is clear evidence that their strategies are working.”