Amazon’s Cloud IaaS and PaaS Investments Pay Off

RENO, NV, March 11 2013

New data from Synergy Research Group show that cloud infrastructure service revenues grew 15 percent between Q4 2011 and Q4 2012 to reach $12.5 billion. Thanks to its significant market share in the high-growth Infrastructure as a Service (IaaS) and Platform as a Service (PaaS) segments, Amazon continues to lead the cloud infrastructure services market.

While revenues associated with the IaaS and PaaS segments account for only 15 percent of the overall market, their growth clearly outpaces that of all other segments. In the past year, IaaS and PaaS revenues increased 55 percent and 57 percent, respectively. Amazon dominates the IaaS segment, accounting for 36 percent of revenues, and is quickly approaching PaaS leader Salesforce’s 19 percent market share. Although well behind Akamai and Level 3 in the CDN/ADN segment, Amazon holds the number three spot with a seven percent market share.

The more mature managed hosting and colocation segments have substantially lower growth rates, at six percent and 13 percent respectively, but remain much larger in terms of revenue generated. Combined, they account for 74 percent of the total market. Rackspace leads the managed hosting segment but is closely followed by Verizon and NTT, while Equinix, Savvis, and SunGard are the colocation market leaders. Across all segments, Amazon is the market leader in North America and NTT leads in the Asia-Pacific region. France Telecom-Orange, British Telecom, and Deutsche Telekom are fighting for the top spot in EMEA.

“There is a fascinating battle for market share developing,” said Synergy Research Group’s John Dinsdale. “Traditional telcos are strong in the more mature managed hosting segment, where they account for eight of the top ten operators, but their impact on the IaaS and PaaS segments has so far been muted. We have no doubts that they will more aggressively target those segments in the coming years.”

About Synergy’s Cloud Infrastructure Service Research

Synergy’s Cloud Infrastructure Services research provides quarterly market sizing and segmentation data, including operator revenues by segment and by region. Data is provided via Synergy’s uniquely flexible SIA database which enables rapid analysis and provides a range of graphic data presentation options. The research covers IaaS, PaaS, managed hosting, colocation and CDN/ADN.