Cloud Market Remains Mostly Sunny
If, as analysts note, pandemic uncertainty is ultimately beneficial for life-line technologies like cloud computing, we can expect continuing double-digit growth in the public cloud sector during 2021 and beyond.
Cloud revenues for the last three months of 2020 confirm this view. Synergy Research Group reports that fourth quarter enterprise spending on cloud infrastructure services topped $37 billion. That’s $4 billion higher than the previous quarter and a 35-percent increase over the same period last year — just before you-know-what hit the fan.
“Notably, for the second successive quarter the year-on-year growth rate increased, which is unusual for such a large, high-growth market,” Synergy noted, adding the public cloud market has doubled in just nine quarters.
Amazon Web Services and Microsoft Azure accounted of more than half the global cloud market, with Microsoft attaining 20-percent global market share during the fourth quarter of 2020. Those gains came not at the expense of market juggernaut AWS but rather from the hides of smaller cloud competitors, the market watcher said, indicating further consolidation of the lucrative cloud marketplace.
AWS held steady during 2020 with dominant market share in the 32 to 34 percent range, Synergy Research reported. Those and Microsoft’s gains come at the expense of struggling competitors who collectively shed about 13 percent in market share over the last four years.
Synergy estimates quarterly cloud infrastructure revenues that include platform and hosted cloud services totaled $37.1 billion during the most recent quarter, fueling annual revenues of $129 billion.
Last year “ended with a bang for the cloud market, as the sequential jump of $4 billion from Q3 easily set a new record for cloud providers’ incremental revenue growth,” said John Dinsdale, Synergy Research Group’s chief analyst.
“Amazon and Microsoft tend to overshadow the market, with Amazon share staying at well over 30 percent and Microsoft growing its share from 10 percent to 20 percent over 16 quarters,” Dinsdale added. “However, after excluding those two, the rest of the market is still growing by over 30 percent per year, pointing to growth opportunities for many of the smaller cloud providers.”
Those growth opportunities include an expanding list of cloud-based machine-learning and data analytics tools as enterprise customers adopt multi-cloud strategies designed to avoid vendor lock-in while migrating more AI and other workloads to the cloud.
For example, also-ran Google Cloud continues to differentiate its cloud offerings with data analytics and machine learning capabilities such as MLOps in a drive to persuade enterprise customers to hedge their cloud bets rather than going all-in with AWS or Microsoft Azure.