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In the IaaS market, the competitive landscape is consolidating around the leaders. The top four providers — Amazon, Microsoft, Alibaba and Google — are all hyperscale IaaS providers and represent approximately 73 per cent of the total IaaS market and 47 per cent of the combined IaaS and infrastructure utility services (IUS) market.
Amazon is the clear leader in the worldwide IaaS market with an estimated $12.2 billion revenue in 2017, up 25 per cent from 2016. The largest of the IaaS providers, Amazon is also the most mature, organisation-ready provider, with the strongest track record of customer success and the most useful partner ecosystem. Growth in 2017 was driven not only by customers that are migrating from traditional data centres to cloud IaaS, but also by customers implementing transformational digital business projects, reflecting its broad range of use cases.
Microsoft secured the No. 2 position in the IaaS market with growth of more than 98 per cent on its IaaS offering, with revenue surpassing $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its Microsoft Azure offering, which is a collection of infrastructure and platform services.
In the third spot, Alibaba's 2017 growth of 63 per cent reflects the company's successful investment in research and development (R&D). Alibaba has the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to the global hyperscale cloud providers in select regions.
"This reflects a fundamental change in what and how organisations 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."
