Morgan Stanley Report: AWS Revenue to Top $24 Billion by 2022

There are several juggernauts in the cloud computing space, but it looks as though Amazon (AMZN) Web Services will remain the top dog for the foreseeable future. According to a Morgan Stanley report on the cloud provider, total annual revenue for AWS will skyrocket to $24 billion by 2022, representing a significant portion of a $152 billion addressable market.

Within the public cloud space, it’s no secret AWS dominates the market. Although Google (GOOG) Cloud, Microsoft (MSFT) Windows Azure, Rackspace (RAX) Cloud and other players both big and small have found footholds in the market, it seems clear AWS will continue to be the go-to public cloud IaaS provider for some time. Naturally, any technology segment can be disrupted by unexpected changes in technology or market dynamics, but considering the way cloud is continuing to catch on and Amazon’s own pricing strategies are having a broad effect on the industry and its competitors, it feels as though there’s little chance anyone is going to catch the company once thought of as little more than an online bookseller.

The 32-page report was scribed by Scott Devitt, a Morgan Stanley managing director focusing on the consumer Internet space, noted that AWS could have an impact on between 3 percent and 17 percent of the traditional IT spending market and have a profound effect on several of its top competitors. Although Google, Azure and Rackspace are among those who are likely to continue to thrive, AWS’s success and growth represents a threat to the likes of VMware (VMW), Red Hat (RHT), Oracle (ORCL), SAP (SAP) and Microsoft (MSFT), according to the report.

As more workloads move to the cloud, AWS and its many competitors will reap the benefits. Amazon’s continual downward pricing pressure will help to solidify its market share and force its competitors to reduce their own prices—something we’ve seen several times, most recently by Joyent, so they can stay competitive against Amazon’s price tags.

This is great news for Amazon and its many partners. The company sells services into 190 countries and is estimated to do more than $2 billion in cloud business annually (some industry analysts believe its annual cloud-based revenue is almost $4 billion).

The report concluded that AWS currently has one of the most “complete set of cloud services and generally the lowest prices.” That’s not to say competitors aren’t carving out their own strong businesses and enticing AWS customers away from the dominant player, but those competitors “are racing to catch up.”