Amazon’s cloud computing division AWS is larger than all four of its closest competitors put together, analysis from Synergy Research Group shows.
Following Amazon’s first quarter results last week, Synergy delved into to study cloud growth rates, with AWS outpacing all of Google, Microsoft, IBM and Salesforce.
But Synergy said Microsoft, with its Azure cloud platform, pinches the title for highest revenue growth rate, and IBM continues to lead in the private and hybrid cloud services segment.
AWS’ market share in the cloud market rose to 29 percent in the first quarter of 2015, with Google “quietly gaining share” whilst remaining half the size of Microsoft. Platform-as-a-Service (PaaS) provider Salesforce, said Synergy, comes in at fifth place.
“Across the full and varied spectrum of cloud activities there are now six companies that can lay a valid claim to having annual cloud revenue run rates in excess of $5 billion – AWS, IBM, Microsoft, HP, Cisco and Salesforce – and all are able to claim leadership in different parts of the cloud market,” said John Dinsdale, an analyst at Synergy Research Group.
“However, on a strict like-for-like basis AWS remains streets ahead of the competition in cloud infrastructure services. Furthermore, this part of the cloud market is growing much more rapidly than SaaS or cloud infrastructure hardware and software.”
Last Thursday, Amazon announced the AWS division took in first quarter revenues of $1.57bn (£1.04bn), up from $1.05 billion (£700m) the previous year.
The company as a whole reported first quarter revenue of $22.72 billion (£15bn), a 15 percent increase from last year.
“Amazon Web Services is a $5 billion business and still growing fast — in fact it’s accelerating,” said Amazon CEO Jeff Bezos in a statement.
But competitor IBM argues that despite the size of AWS, the companies are operating in different markets. The company said that the cloud market is splitting between low-end, low-margin cloud offerings in the public cloud space, and the higher-value, higher profit cloud services. “IBM is successfully targeting that high value Cloud space,” an IBM spokesperson told TechWeekEurope.
Last week, IBM announced revenues of £13.2 billion in the first quarter of 2015, a 12 percent fall year-over-year. This is IBM’s twelfth consecutive quarter of revenue decline.
But IBM’s CFO Martin Schroeter said in a statement that it’s the company’s cloud performance figures which show IBM’s progression in the market.
He said: “Our cloud revenue was up over 75 percent year to year. On a trailing twelvemonthbasis, our cloud revenue was US$7.7 billion. This is a demonstration of high growth in the higher-value cloud opportunities across public, private and hybrid. We had terrific performance in our cloud foundational and as-a-Service offerings. And we exited the quarter with an annual as-a-Service run rate of US$3.8 billion, that’s up a billion and a half in the last year.”
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In a sense, most of Google's revenues could be said to be Cloud if you regard their search service as SaaS, with its revenue model being indirect via advertising.