Amazon holds nearly half of IaaS market share, while Alibaba witnesses highest growth: Gartner

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The global Infrastructure as a Service (IaaS) market reached $32.4 billion in 2018, witnessing a growth of 31.3% from $24.7 billion in 2017, finds Gartner.

Amazon continues to dominate the market, retaining the number one position in IaaS cloud market, followed by Microsoft, Alibaba, Google, and IBM.

“Despite strong growth across the board, the cloud market’s consolidation favors the large and dominant providers, with smaller and niche providers losing share,” said Sid Nag, research vice president at Gartner.

“This is an indication that scalability matters when it comes to the public cloud IaaS business. Only those providers who invest capital expenditure in building out data centers at scale across multiple regions will succeed and continue to capture market share. Offering rich feature functionality across the cloud technology stack will be the ticket to success, as well.”

Amazon accounted for $15.5 billion of IaaS revenue in 2018, up 27 percent from the year 2017. With this, Amazon is now holding around half of the share in IaaS market.

Microsoft’s IaaS revenue crossed $5 billion mark in 2018, up from 3.1 billion in 2017. Whereas, Alibaba Cloud witnessed the highest growth rate in the IaaS market, growing 92.6% in 2018. Its growth was driven by increased R&D investment in the portfolio of services.

Google made it to the 4th position, experienced a growth of 60.2% in the market.

“Google’s cloud offering is something to keep an eye on with its new leadership focus on customers and shift toward becoming a more enterprise-geared offering,” said Mr. Nag.


“As the cloud business continues to gather momentum and hyperscale cloud providers consolidate the market, product managers at cloud MSPs must look at other ways to differentiate, such as focusing on vertical industries and getting certified in the hyperscale cloud provider partner programs in order to drive revenue,” said Mr. Nag.

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