The worldwide infrastructure as a service (IaaS) public cloud market grew 31% in 2016 to total $22.1 billion, up from $16.8 billion in 2015, according to Gartner. Amazon was the No. 1 vendor in the IaaS market in 2016, followed by Microsoft and Alibaba.
“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, noncloud offerings,” said Sid Nag, Research Director at Gartner. “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. 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.”
Within the IaaS market, there is significant above-market growth for the big three hyperscale IaaS cloud providers. While Amazon Web Services dominated the market in 2016, Microsoft Azure gained more momentum, and Google made some gains. Looking forward, Gartner’s position is that while competitive pressures increase, Amazon will witness growth erosion in share, as the non-hyperscale providers struggle to provide value through their services, while other IaaS market leaders will see an increase in growth.
Amazon is the clear leader in the IaaS market with 44.2% of the market. Microsoft secured the No. 2 position in the IaaS market with 7.1% market share, an increase of 61.1% over 2015. In the third spot, Alibaba’s 2016 growth of 127% reflects the company’s position as the current volume leader and dominant player in the cloud services market in China. “The worldwide public cloud service market growth continues, driven by digital business initiatives, data center consolidations and application migrations to the cloud,” said Mr. Nag.