Global infrastructure-as-a-service (IaaS) market reached $23.5 billion in 2017, up 29.5% from 2016, according to tech analyst firm Gartner.
Amazon Web Services (AWS) continues to dominate the worldwide IaaS market with more than $12 billion revenue, accounting for over 50% of the total IaaS market.
But Microsoft Azure grew faster than AWS in 2017. While AWS could witness only 25% revenue growth, Azure grew 98.2%, reported Gartner. Alibaba, Google and IBM followed Amazon and Microsoft in the IaaS market.
Gartner said that the competitive landscape is consolidating around the leaders. Amazon, Microsoft, Alibaba and Google are hyperscale IaaS providers, accounting for 73% of the total IaaS market.
“The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organizations and as cloud availability expands into new regions and countries,” said Sid Nag, research director at Gartner.
“Cloud-directed IT spending now constitutes more than 20 percent of the total IT budget for organizations using cloud. Many of these organizations are now using cloud to support production environments and business-critical operations.”
Along with being the largest IaaS provider, AWS also led the maturity level when it comes to providing enterprise-ready services. Customers moving from traditional data centers to cloud IaaS, and those implementing digital transformation initiatives helped AWS grow in 2017.
Microsoft’s revenue from IaaS cloud services crossed the $3 billion milestone, whereas Alibaba surpassed the $1 billion milestone, growing 62.7% in 2017. Alibaba’s growth is driven by its successful investment in research and development (R&D).
“This reflects a fundamental change in what and how organizations are consuming technology. Some legacy infrastructure offerings, such as IUS, are seeing lower and slower uptake that impacts the combined IaaS and IUS market,” Mr. Nag said.
“Additionally, a groundswell of demand for cloud-skilled personnel is forcing technology providers to change how they compete to meet this exploding demand.”
Gartner analysts will explore the latest cloud trends at the Gartner IT Infrastructure, Operations & Cloud Strategies Conferences in London and Las Vegas.