Study: Big Four Cloud Infrastructure Providers Continue to Dominate Market

Bad news for mom and pop cloud infrastructure providers: Amazon Web Services, Microsoft, IBM and Google continue to eat up more of the worldwide cloud infrastructure service market than ever before, according to a new study from Synergy Research Group.

Synergy’s latest study found that the big four cloud providers have a combined international market share of 54 percent, compared to last year’s number of 46 percent during the same time period. This year marks the 2^nd consecutive year of continued market growth for the companies’ combined market share, according to Synergy.

In terms of financial revenue, the Big Four averaged a year-on-year growth rate of 84 percent in Q2, compared to 33 percent growth for the rest of the market. Each of the four companies also increased their individual share of the worldwide market this quarter, with Amazon continuing to dominate with 29 percent of global customers.

The increasing gap between the major cloud infrastructure providers and their competitors is only expected to widen, said John Dinsdale, a chief analyst and research director at Synergy Research Group. Similar to the differences between major pharmaceutical companies like CVS or Walgreens and family-owned drug stores, small-time cloud infrastructure providers simply do not have the resources necessary to go head-to-head with the likes of their competitors.

“Developing the necessary global hyperscale data center infrastructure along with the required marketing and operations support is simply beyond the reach of all but a very small number of players, said Dinsdale, in a statement. “This is not going to change. The good news for the plethora of small-to-medium-sized cloud providers is that there does remain a wealth of opportunity for those that are focused on specific market niches or local geographic areas.”

Synergy also estimated that quarterly cloud infrastructure service revenues from services such as IaaS, PaaS and private and hybrid cloud deployments hovers somewhere around $6 billion, with 12-month revenues nearing $20 billion. More than half of worldwide revenue continues to emanate from North America, followed by EMEA and APAC, according to the company.

While the seemingly unstoppable growth of companies like AWS and Microsoft bodes ill for small cloud infrastructure providers, it’s important to remember that there will always be subsets of customers who need the kind of service and personal attention that billion dollar companies like Amazon simply cannot provide. If infrastructure providers wish to remain relevant in the market, it is important to find and stake out a particular customer niche and focus all possible resources on serving the particular needs of that group.