Skip to main content

The cloud infrastructure market hit $129B in 2020



The cloud infrastructure market in 2020 reflected society itself, with the richest companies getting richer and the ones at the bottom of the market getting poorer. It grew to $129 billion for the year, according to data from Synergy Research Group. That’s up from around $97 billion in 2019.

Synergy also reported that the cloud infra market reached $37 billion in the fourth quarter, up from $33 billion in the third quarter, and 35% from a year ago.

I’ve heard from every founder under the sun for the last nine months that the pandemic was accelerating digital transformation, and that a big part of that was an expedited shift to the cloud. These numbers would seem to bear that out.

As usual the big three were Amazon, Microsoft and Google, with Alibaba now firmly entrenched in fourth place and IBM falling back to fifth. But Microsoft grew more quickly than rival Amazon, reaching 20% market share at the end of 2020 for the first time. Keep in mind that the Redmond-based software giant has now doubled its share since 2017. That’s remarkably rapid rapid growth. Meanwhile Google and Alibaba took home 9% and 6%, respectively.

Here’s what that all looks like in chart form:

Amazon is an interesting case in that it has plateaued at around 33% for four straight years of Synergy data, but because it’s one-third share of an increasingly growing market, that means that it has kept growing its public cloud revenues as the category itself has expanded.

Amazon closed out the year with $12.74 billion in Q4 AWS revenue, putting it on a run rate of just over $50 billion for the first time. That was up from $11.6 billion the prior quarter. While Microsoft’s numbers are always difficult to parse from its earning’s reports, doing the math of 20% of $37 billion, it came in with $7.4 billion up from $5.9 billion last quarter.

Google brought in $3.3 billion, up from $2.98 billion in Q3 2020, and Alibaba pulled in $2.22 billion, up from $1.65 billion over the same time frame.

John Dinsdale, principal analyst at Synergy, says the leaders are pretty firmly entrenched at this point with huge absolute market numbers and also huge gaps between the cloud providers. “AWS has been a great success story for over 10 years now and it remains in an extremely strong market position despite increasing competition from a broad swathe of strong IT industry companies. That is a great testament both to Amazon and to the AWS leadership team and you’d have to suspect that will not change with the new regime,” he told me.

He sees Microsoft as a worthy rival, but one that is bound to hit a growth wall at some point. “It is certainly feasible that Microsoft will continue to narrow the gap between itself and Amazon, but the bigger Microsoft Azure becomes the tougher it is to maintain really high growth rates. That is just the law of large numbers.”

Meanwhile, market share at the bottom of the cloud infrastructure space continued to decline even while the number of dollars at stake have continued to expand dramatically. “The market share losers have been the large group of smaller cloud providers, who collectively have lost 13 percentage points of market share over the last 16 quarters,” Synergy wrote in a statement.

Dinsdale says all is not lost for these players, however. “Regarding the smaller players (or the big companies that have only a small market share), they can either focus on specific market niches (can be based around geography, service type or customer vertical) or they can try to offer a broad range of cloud services to a broad range of customers. Companies doing the former can do quite well, while companies doing the latter will find it extremely tough,” Dinsdale told me.

It’s worth noting that Canalys has slightly different numbers with a total market of around $142 billion and almost $40 billion for the quarter, but the percentages are in line with Synergy’s:

At some point the numbers get so big they almost cease to have meaning, but as large as the public cloud revenue numbers become, they remain a relatively small percentage of overall worldwide IT spend. According to Gartner estimates, worldwide IT spend in 2020 was $3.6 trillion (with a T). That means that the cloud infrastructure market accounted for just 3.85% of total spend in 2020.

Think about that for a moment: less than 4% of IT spend currently is on cloud infrastructure, leaving so much room for growth and for those billions to grow ever bigger in the coming years.

It would certainly make it more interesting if someone could come in and disrupt the leaders, but for now at least they are going to be hard to push out of the way unless something unforeseen and dramatic happens to the way we think about computing.


Originally published at https://techcrunch.com.

Comments

Post a Comment

Popular posts from this blog

Babuk ransomware is back, uses new version on corporate networks

  After announcing their exit from the ransomware business in favor of data theft extortion, the Babuk gang appears to have slipped back into their old habit of encrypting corporate networks. The criminals are currently using a new version of their file-encrypting malware and have moved the operation to a new leak site that lists a handful of victims. Gang’s still in the game The Babuk ransomware group became known at the beginning of the year but the gang says that their attacks had started in mid-October 2020, targeting companies across the world and demanding ransoms typically between $60,000 and $85,000 in bitcoin cryptocurrency. In some cases, victims were asked hundreds of thousands for data decryption. One of their most publicized victims is the Washinton DC’s Metropolitan Police Department (MPD). This attack likely pushed the threat actor into announcing its retirement from the ransomware business only to adopt another extortion model that did not include encryption....
Post a Comment
Read more

Ransomware's Dangerous New Trick Is Double-Encrypting Your Data

  Ransomware groups have always taken a more-is-more approach . If a victim pays a ransom and then goes back to business as usual-hit them again. Or don’t just encrypt a target’s systems; steal their data first, so you can threaten to leak it if they don’t pay up. The latest escalation? Ransomware hackers who encrypt a victim’s data twice at the same time. Double-encryption attacks have happened before, usually stemming from two separate ransomware gangs compromising the same victim at the same time. But antivirus company Emsisoft says it is aware of dozens of incidents in which the same actor or group intentionally layers two types of ransomware on top of each other. “The groups are constantly trying to work out which strategies are best , which net them the most money for the least amount of effort,” says Emsisoft threat analyst Brett Callow. “So in this approach you have a single actor deploying two types of ransomware. The victim decrypts their data and discovers it’s not act...
Post a Comment
Read more

Linux For Apple M1 Macs is Finally Here, Thanks To Corellium

  Just when we thought that Desktop/Notebooks on ARM chipsets doesn’t make any sense, Apple came up with a revolutionary chipset M1 and showed the world what it’s capable of. Unlike other Mac counterparts with Intel CPUs, M1 lacked the ability to run Linux, until yesterday. Thanks to Corellium, running Linux for M1 Macs is now possible. The company known for winning a lawsuit against Apple has finally created its own Linux OS for M1 Macs. This certainly opens doors for other Linux communities to do the same. Corellium’s Linux For M1 Macs Is In Early Beta Stages Creator of Linux, Linus Torvalds, wanted M1 Macbook Air to run Linux , and it’s finally a reality. Corellium’s CTO, Chris Wade, tweeted yesterday that Corellium’s Linux OS is available and is in very early beta stages. Adding to that, he also warned users to go ahead with the installation only if they know what they’re doing. More details about the “full release with USB” were supposed to be revealed today, but there’s ...
Post a Comment
Read more