Amazon Web Services (AWS) maintained its seemingly unassailable dominance of the public cloud sector in 2013, capturing a third of a market that almost doubled in 12 months to £10bn. While IBM, Google and Microsoft all showed healthy cloud growth, there were no signs of the three IT giants making any inroads into AWS’s runaway lead.
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According to Synergy Research Group's (SRG) latest snapshot of the infrastructure as a service (IaaS) and platform as a service (PaaS) market, revenues hit $3bn for the fourth quarter of 2013 with AWS taking well over $1bn. Combined revenues for Microsoft, IBM and Google in the same period were around $550m.
The doubling in size of the market meant all the major players saw impressive cloud growth last year, but John Dinsdale, chief analyst and research director at SRG, said he didn’t expect any of Amazon’s rivals to close the gap on the cloud leader any time soon. “While they are gaining market share it is not at the expense of Amazon, which is doing a very impressive job of maintaining its leadership in this strategically important high-growth market,” said Dinsdale.
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In recent months, all the players have accelerated their drive to win more cloud business. Among the more notable developments, Google made its Google Compute Engine generally available, cut prices and introduced a raft of new functionality (including automatic migration of live systems and restarting of virtual machines – features AWS does not yet offer).
Meanwhile, Microsoft enlisted elite service provider partners into its CloudOS Network in a bid to make cloud migration easier for cusotmers and IBM announced its $1.2 billion investment in new cloud datacentres across the globe. AWS also kept up the pressure on rivals to innovate with a series of new product and feature announcements at its re:Invent conference in November.
“AWS and Google are generating a lot of revenue from new customers while IBM is more in the mode of harvesting existing accounts – with Microsoft somewhere in the middle,” said Dinsdale.
As yet, however, these moves have had little impact on the players’ relative positions. “These things tend to affect momentum over time rather than having a one-off impact," said Dinsdale. This is especially the case with investing in new datacentres, but it also applies to many marketing and sales activities.”
He added that the law of numbers is also at play here: “AWS has such a big lead over its main competitors that what may be a major positive shift for an IBM or a Google might have minimal impact on AWS. For example, even if IBM consistently grew its IaaS/PaaS revenues at double the rate of AWS, AWS would still have a strong market-share lead over IBM five years from now.”