- AWS holds 32% market share, followed by Microsoft with 19%, Google with 7% and Alibaba with 6% as of third quarter.
- Infrastructure services spend benefits from Covid-19 to $36.5b, registering a 33% year-on-year growth.
- Some organisations take a cost-driven approach by reducing capital expenditure on their own datacentres and cutting management costs from outsourcing contracts, Canalys says.
Dubai: Amazon Web Services (AWS) is still the leader in the cloud infrastructure market and generated more revenue than the next three largest cloud service providers combined in the third quarter.
As per research firm Canalys stats, AWS market share of 32 per cent in the third quarter is equal to Microsoft Azure, Google Cloud and Alibaba Cloud combined.
Microsoft had a market share of 19 per cent, followed by Google with seven per cent and Alibaba with six per cent.
Top four providers collectively grew 40 per cent in the quarter.
According to Synergy Research Group, AWS still leads the pack with 33 per cent market share, followed by Microsoft with 18%, Google with 9%, Alibaba with 5%, IBM with 5%, Salesforce with 3%, Tencent with 2%, Oracle with 2%, NTT with 1% and SAP with 1%.
Canalys reported that total infrastructure services spend benefited from the fallout of the Covid-19 pandemic in the third quarter of this year to $36.5 billion, witnessing a year-on-year growth of about 33 per cent compared to $27.5 billion a year ago.
In the second quarter, the total spend stood at $34.6 billion.
Matthew Ball, Chief Analyst at Canalys, said that spending remains robust despite the global economic downturn, primarily for products and services enabling business continuity, including notebook PCs and peripherals, cloud-based services and cybersecurity.
Richard L. Villars, Group Vice-President at research firm International Data Corporation, said that based on lessons learned in the pandemic, most enterprises will put a mechanism in place to accelerate their shift to cloud-centric digital infrastructure and application services by the end of 2021, twice as fast as before the pandemic.
Spending remains robust
AWS’ businesses grew by $2.6 billion in the third quarter to $11.60 billion while analysts expect Microsoft Azure revenue to be about $6.3 billion.
Microsoft does not report on Azure revenues but said that is revenues grew 48 per cent on an annual basis.
AWS growth rate has been falling steadily for the past two years and it fell to 29 per cent in the second quarter of this year and it remained the same in the third quarter.
Google Cloud’s revenue, including Google Cloud Platform (GCP), Google Workspace (formerly G Suite) productivity tools and other enterprise cloud services – increased to $3.44 billion, compared to $2.38 billion in the same quarter last year.
Starting with Alphabet’s fourth-quarter results, the company will break out Google Cloud as a separate reporting segment.
Ball said that spending remains robust despite the global economic downturn, primarily for products and services enabling business continuity, including notebook PCs and peripherals, cloud-based services and cybersecurity.
Organisations take a cost-driven approach
“Increased consumption has driven cloud infrastructure services spend this year, though some larger and more complex deals were delayed due to uncertainty caused by the pandemic,” he said.
But as organisations adjust to the new normal, he expects longer-term projects to accelerate again.
However, he said that some organisations are taking a cost-driven approach by reducing capital expenditure on their own data centres and cutting management costs from outsourcing contracts. “Others are taking a transformational approach, developing new cloud-native applications and business models. But they will all have to be more measured and cost-conscious, requiring greater control and visibility of spend, while also deciding not to migrate every workload,” he said.
Multi-cloud and hybrid IT will continue to gain momentum as organisations assess the optimal deployment and operating model for each workload, based on cost and performance.
“Cloud in all its permutations – hardware/software/services/as a service as well as public/private/hybrid/multi/edge – will play ever greater, and even dominant, roles across the IT industry for the foreseeable future,” Villars said.
Collaboration with telcos
Research firm Gartner states that spending on datacentre systems will experience the second-highest of growth of 5.2% in 2021 as hyperscalers accelerate global datacentre build-out and regular organisations resume datacentre expansion plans and allow staff to be physically back onsite.
Blake Murray, Canalys Research Analyst, said that the convergence of cloud and 5G at the mobile edge will form the next wave of growth for the leading cloud service providers.
“It also represents a new front for infrastructure buildout and competition between AWS with Wavelength, Microsoft Azure with Edge Zones and Google Cloud with Mobile Edge Cloud,” he said.
All three are collaborating with mobile operators to deploy their cloud stacks at the edge in the operators’ datacentres.
“These are part of holistic initiatives to profit from 5G services among business customers, as well as transform the mobile operators’ IT infrastructure,” Murray said.