Gartner Says Worldwide IaaS Public Cloud Services Market Grew 31 Percent in 2016

SINGAPORE, September
27, 2017 — The
worldwide infrastructure as a service (IaaS) public cloud market grew 31 percent in 2016 to total
$22.1 billion, up from $16.8 billion in 2015, according to Gartner, Inc..
Amazon was the No. 1 vendor in the IaaS market in 2016, followed by Microsoft
and Alibaba.

“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, noncloud
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) andsoftware as a service (SaaS) are also exhibiting strong
growth, IaaS is expected to show the fastest growth over the next five
years.”

Within
the IaaS market, there is significant above-market growth for the big three
hyperscale IaaS cloud providers. While Amazon Web Services dominated the market
in 2016, Microsoft Azure gained more momentum, and Google made some gains.
Looking forward, Gartner’s position is that
while competitive pressures increase, Amazon will witness growth erosion in
share, as the non-hyperscale providers struggle to provide value through their
services, while other IaaS market leaders will see an increase in growth.

Amazon is the clear
leader in the IaaS market with 44.2 percent of the market (see Table 1). Amazon
has achieved this position by serving the most customers across the
broadest range of use cases — from cloud-native startups, to midmarket
businesses wanting to lift and shift traditional applications, to enterprises
executing transformational migrations to the cloud.

Note: 2015-2016 revenue
for Alibaba has been adjusted from estimates previously published in
“Market Share: IT Services, 2016”

Source: Gartner
(September 2017)

Microsoft secured the No. 2 position in the IaaS market with 7.1
percent market share, an increase of 61.1 percent over 2015. Microsoft solidified
its position as a leading IaaS provider through focused investment in the
development of IaaS capabilities and in solid sales and marketing execution.

In the third spot, Alibaba’s 2016 growth of 127 percent reflects
the company’s position as the current volume leader and dominant player in the
cloud services market in China. Actively expanding its international footprint,
it also announced in 2016 the launch of four new data centers located in
Europe, Australia, the Middle East and Japan.

“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.”

Gartner clients can
learn more at in the report “Market Share Analysis: Public Cloud Services,
Worldwide, 2016.”

Gartner
analysts will provide additional analysis on cloud trends at the Gartner Global
Infrastructure & Operations events November 27-28, 2017 in London, December 4-7, 2017 in Las Vegas and May 15-17, 2018 in Orlando. Follow news and updates from these events on Twitter
using #GartnerIO.

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