IaaS/PaaS Providers Make Strong Market Push, AWS Still Leads

Maybe it should be little surprise that a report from Synergy Research Group shows that Amazon Web Services (AWS) continued to dominate the combined infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) market during the fourth quarter of 2013. What might be a bit more of a surprise is that some of its nearest competitors actually outgrew the public cloud services giant.

According to the latest Synergy IaaS/PaaS market research report, Microsoft (MSFT), Google (GOOG) and IBM (IBM) all exceeded the growth rate of AWS. Both Microsoft and IBM almost doubled their IaaS/PaaS revenue year over year in the fourth quarter.

Total market revenue for the quarter grew 52 percent, and the report noted that Amazon (AMZN) grew 65 percent, increasing its worldwide market share to more than 30 percent. Surprising? Not really. Although competitors may lay claim to bigger market share in certain market segments, the overall market is still dominated by the letters A, W and S.

Now that most IaaS/PaaS companies have released their earnings for Q4, Synergy estimated the total market to be valued at $3 billion, the first time the market has achieved such numbers. That means overall 2013 revenue from IaaS and PaaS fell just short of $10 billion, according to Synergy.

During the final quarter of the year, Amazon’s total revenue was an impressive $1 billion. Annual revenue was $3 billion for the year.

Synergy noted that both IBM and Microsoft can be proud of their large cloud revenues, but much of their respective revenue streams came from software, private cloud services, cloud-related hardware products and professional and technical services.

“The big three global IT vendors are putting the pedal to the metal on cloud infrastructure services and are rapidly expanding their service footprints and revenues,” said John Dinsdale, a chief analyst and research director at Synergy Research Group, in a prepared statement. “However, while they are gaining market share, it is not at the expense of Amazon. It is doing a very impressive job of maintaining its leadership in this strategically important high-growth market.”

That 800-pound gorilla in the room? It still looks a lot like the company that started out as an online book retailer. (How times have changed.)

Synergy didn’t extrapolate on future market trends, but it seems likely Amazon will continue to dominate the IaaS/PaaS market for the next while. But this is the technology industry. Anything can happen, and those on top don’t always stay there.