Incremental growth in cloud spending hits a new high: SRG

Q4, 2019 spend on cloud infrastructure services increased by USD 2.8 billion over the previous quarter, which is by far the biggest quarterly increment the market has seen

Incremental growth in cloud spending hits a new high: SRG - CIO&Leader

Q4, 2019 spend on cloud infrastructure services increased by USD 2.8 billion over the previous quarter, which is by far the biggest quarterly increment the market has seen, according to Synergy Research Group. At 37%, the year-on-year growth rate is slowly trending down, but this is due to the massive scale of the market which forces growth rates to moderate. Meanwhile, Amazon growth continued to closely mirror overall market growth; so it maintained its 33% share of the worldwide market. Second ranked Microsoft again grew fast than the market and its market share has increased by almost three percentage points in the last four quarters, reaching 18%. Behind these two market leaders, Google, Alibaba and Tencent are substantially outpacing overall market growth and are gaining market share. All three saw revenues increase by 50% or more year-on-year. Four other cloud providers have substantial market share but are somewhat niche players and typically have lower growth rates – IBM, Salesforce, Oracle and Rackspace.

With most of the major cloud providers having now released their earnings data for Q4, Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) were well over USD 27 billion, with full-year 2019 revenues reaching over USD 96 billion. Public IaaS and PaaS services account for the bulk of the market and those grew by 38% in Q4. In public cloud the dominance of the top five providers is even more pronounced, as they control over three quarters of the market. Geographically, the cloud market continues to grow strongly in all regions of the world.

“The year ended with a bang as Amazon and Microsoft both posted big sequential gains in cloud revenues,” said John Dinsdale, Chief Analyst at Synergy Research Group. “Thanks to these two market leaders and strong growth from some other cloud providers, the 2019 market was over twice the size of the 2017 market. Given secular trends in the market we will continue to see strong growth. We will also see a continuing battle for market position between the global giants and smaller cloud providers that have a more focused geographic or service footprint.”

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