Amazon Leads IaaS and PaaS Market, but Competitors Catching Up: Synergy Research

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Though Amazon still maintains a significant lead in the IaaS and PaaS market, Microsoft, Google and IBM are growing aggressively, according to new Q2 data from Synergy Research Group released on Wednesday.

According to the research, Microsoft, Google and IBM’s collective revenues in the market reach 63 percent of Amazon’s. Amazon grew by 52 percent year-over-year, increasing its overall market share to more than 28 percent.

Total IaaS and PaaS revenues for Q2 totaled $2.25 billion, with IaaS accounting for 64 percent. While Amazon does not disclose revenues of its AWS business, recent research by Morgan Stanley estimates that by 2022, AWS will have $24 billion in revenue.

With IBM, Google and Microsoft making assertive moves in the IaaS and PaaS space, collectively they have the potential to disrupt AWS’ market share. Over the next few years though, the opportunity for cloud service providers will be less focused on competing with Amazon, and more on creating cloud services for specific workloads and industries.

“Starting from a much smaller base, the big three IT companies actually achieved higher growth rates, but Amazon is doing an impressive job of keeping its grip on market leadership and remains in a league of its own,” Synergy Research Group’s John Dinsdale said in a statement. “The real race is to see if any of the chasing pack can establish themselves as a clear number two in the IaaS/PaaS market. While IBM’s acquisition of SoftLayer helped it to leapfrog both Microsoft and Google, the three remain tightly bunched with somewhat similar growth trajectories.”

In Q2, North America accounted for 53 percent of the IaaS and PaaS market, with EMEA and APAC each accounting for 21 percent and Latin America 5 percent. According to the data, Amazon is the clear market leader in each of the four regions.

Managed hosting for the quarter grew by two percent year-over-year, with retail colocation growing by 8 percent and CDN by 15 percent.

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  1. What "PaaS" solution is AWS leading with? IaaS is pretty clear cut but I'm not aware of any widespread usage of an AWS PaaS. I don't think these two types of solution/product categories should be lumped together.