Despite Crazy Cloud Growth, Competitors Still Can't Touch AWS

Amazon Web Services (AWS) may not be the fastest growing cloud infrastructure service provider, but it’s so far ahead of the others in terms of market share that Synergy Research says it’s in a “league of its own.”

This week AWS, Microsoft, and Alphabet released quarterly earnings results, showing strong growth in cloud services.

According to Synergy, in Q1 2017, Microsoft, Google, IBM, Alibaba and Oracle all achieved growth rates that were “substantially higher than that of AWS” but AWS revenues are “comfortably bigger than the other five combined.”

Microsoft, Google and Alibaba achieved annual growth rates exceeding 80 percent, while niche cloud providers like Rackspace and Salesforce have lower growth rates but maintain strong positions in their respective markets. This week Rackspace rolled out professional services for AWS cloud.

AWS reported quarterly “revenue of $3.66 billion, slightly topping estimates and reflecting 42.6 percent growth, and operating income of $890 million,” according to MarketWatch. Microsoft performed slightly better than expected, with revenue of $23.6 billion, versus $23.62 billion that was expected in the quarter. Alphabet includes its cloud business revenues in “other revenues” – in this quarter alone, according to Quartz, Google generated $3 billion in other revenues, an increase of 50 percent over the same quarter the year before.  ​

“At the top end of the cloud provider market we’re now seeing a clear stratification featuring AWS, a group of higher-growth chasers, and a couple of more focused niche players,” John Dinsdale, a Chief Analyst and Research Director at Synergy Research Group said in a statement. “Beyond those leading companies, the cloud market features a long tail of small-to-medium sized providers or companies that have only a minor position in the market, typically based on either a specific country or focused application area. There are decent growth opportunities for some of these smaller players, but they are unlikely to make much impact in terms of overall worldwide market share.”