New data from Synergy Research Group shows that Q4 spend on cloud infrastructure services jumped 45% from the fourth quarter of 2017, giving a full-year growth rate of 48% in 2018. Notably the growth rates seen throughout 2018 were higher than those achieved in 2017. Amazon, the clear market leader, nudged its market share upwards and remains equivalent in size to its next four competitors combined. Meanwhile revenue growth at Microsoft, Google and Alibaba again far surpassed overall market growth rate, so all three gained substantial market share, with Microsoft in particular jumping ahead. The market share gains of these four was primarily at the expense of small-to-medium sized cloud operators, who collectively have lost five percentage points of market share over the last four quarters. Many of those smaller players are still growing revenues but find themselves unable to keep pace with the market leaders. Among the leaders, IBM’s prime focus is a little different from the others as it remains the strong leader in the hosted private cloud services segment of the market.

With most of the major cloud providers having now released their earnings data for Q4, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were approaching $20 billion, giving a full-year total of almost $70 billion. Public IaaS and PaaS services account for the bulk of the market and those grew by 49% in Q4. In public cloud the dominance of the top five providers is even more pronounced, as they control over three quarters of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.

“Q4 tops off a banner year for the cloud market with the annual growth rate actually nudging up from the previous year, which is an unusual phenomenon for a high-growth market of this scale,” said John Dinsdale, a chief analyst at Synergy Research Group. “The rate at which the market leaders continue to expand is really rather impressive. In aggregate the top five drove up their revenues in these segments by 60% in 2018, which has caused us to review and increase our five-year forecast for the market. Inevitably there will be a few road bumps along the way but these will be minor relative to the factors that continue to drive the market.”