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IaaS Public Cloud Services Market Grew 31% in 2016 with Amazon in lead, followed by Microsoft, Alibaba: Gartner report

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As per a new report by Gartner, Amazon Web Services dominated the world of IaaS market by being the #1 vendor in 2016, closely followed by Microsoft and Alibaba. More than $22 billion was spent on public cloud infrastructure-as-a-service (IaaS) during 2016, which is 31% more than in 2015.

There is a significant growth for all three hyperscale IaaS cloud providers, but looking forward, with the increase in competition, AWS will experience an erosion in growth, as per Gartner.

Alibaba increased its cloud infrastructure revenue in 2016 to more than double, and has shown enough growth to outpace Google, even though it posted 100 % growth itself.

“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, non-cloud 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.”

Amazon Web Services owned more than 44 % share of the IaaS market in 2016, up from 39.8 % the previous year. The secret behind AWS’s dominance is its ability to serve customers across a broad range of cases – from startups to mid-sized businesses to big enterprises transform to cloud.

“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. “Technology strategic planners must build both relevant offerings and partner-based ecosystems to seize the opportunity.”

Also read: Gartner survey reveals top 5 ways successful leaders prepare for digital ecosystem

Microsoft solidified its position with an increased revenue of 61.1 % over 2015, and secured the 2nd position with 7.1 % market share.

The growth of Alibaba in 2016 was 127 % which strengthened its position as the current volume leader in cloud services market in China.

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