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Cloud infrastructure supplier growth rates start to stabilise as market matures

Latest quarterly cloud market tracker data from Synergy Research Group suggests sector is maturing, despite Amazon, Google and Microsoft's growth outpacing the rest of the market

The amount of money spent on cloud infrastructure services during the first quarter of 2019 is up 42% on last year, while the growth rates of the major providers start to level out.

According to Synergy Research Group’s first quarter look at the cloud infrastructure services market, which tracks the performance of suppliers in the infrastructure- (IaaS) and platform-as-a-service (PaaS) categories, the downturn in growth rates should be viewed as a sign of market maturation.

Furthermore, the first quarter marks the eighth consecutive quarter that the size of the cloud infrastructure market has increased by well over a billion dollars, compared to the previous one.

“The overall growth rate has tailed off a bit due to the law of large numbers, but this should absolutely not be viewed as a weakness in the market,” said John Dinsdale, chief analyst at Synergy Research Group. “It is still growing at a very impressive rate for such a big market.”

From a supplier standpoint, Amazon Web Services (AWS) continues to lead the sector by quite some considerable margin, with its growth outpacing the rest of the market – as it has done for the past eight consecutive quarters. As a result, Synergy’s figures suggest its share now stands at 33%, while its nearest competitor, Microsoft, has less than halve that at 16%.

Google, meanwhile, accounts for 8% of the market, while IBM (6%), Alibaba (5%) and Salesforce (4%) round out the top six.

Amazon is far from alone in the fact that it is growing faster than the market as a whole, as Synergy’s data suggests Microsoft, Google, Alibaba and Tencent achieved the same during the first quarter, with all four achieving year-on-year revenue growth rates in excess of 70%.

During the three months to the end of March, Synergy estimates the suppliers that make up the cloud infrastructure market generated more than $21bn in revenue between them, with IaaS and PaaS emerging as the biggest source of sales, with both categories reporting growth of around 48%.

“As the market goes from strength to strength, the pack of cloud providers that are chasing Amazon has bifurcated into high-growth challengers and lower growth niche-oriented providers. But Amazon retains its strong leadership position and continues to control a third of the worldwide market,” added Dinsdale.

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