IBM, Microsoft and Google Make Little Headway Against Amazon’s IaaS/PaaS Dominance

RENO, NV, November 26, 2013

New Q3 data from Synergy Research Group shows that the three global IT giants - Microsoft, IBM and Google – continue to lag far behind Amazon (AWS) in the IaaS/PaaS market, despite all of them achieving strong growth and despite IBM’s acquisition of SoftLayer. Even after adding the PaaS revenues of salesforce.com, in aggregate the group lags some 15% behind Amazon in terms of IaaS/PaaS revenues. In a worldwide market that grew 46% from Q3 of 2012, Amazon grew by 55% and increased its overall market share.

Total IaaS/PaaS revenues for the quarter passed the $2.5 billion milestone, with IaaS accounting for the lion’s share - 64%. North America accounted for 53% of the Q2 market, with EMEA and APAC each accounting for 21% and Latin America 5%. Amazon is the clear market leader in each of the four regions, though the ranking of the chasing pack does differ by region. Associated infrastructure service markets all grew in the quarter, but much more slowly than IaaS and PaaS. Managed hosting revenues grew by 3% year on year, retail colocation grew by 8% and CDN by 14%.

“We’ve been analyzing the IaaS/PaaS markets for quite a few quarters now and creating these leadership metrics, and the relative positioning of the leaders really hasn’t changed much. While Amazon dwarfs all competition, the race is on to see if any of the big four followers can distance themselves from their peers” said Synergy Research Group’s John Dinsdale. “The good news for these companies and for the long tail of operators with relatively small cloud infrastructure service operations, is that IaaS/PaaS will be growing strongly long into the future, providing plenty of opportunity for robust revenue growth."