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While cloud spending slowed in Q3 2018, it's still growing at a faster rate than last year.
October 26, 2018
Spending growth on cloud providers slowed some in the most recent quarter, but the market is still growing. The top four cloud providers are continuing to dominate the market, leaving less room for smaller companies.
With the last two of the major cloud providers reporting third-quarter earnings Thursday afternoon, Synergy Research delivered its quarterly market share report soon after. The research firm found that spending on cloud infrastructure services was up 45% year-over-year, "a little slower than the growth rate achieved in the first two quarters of the year, but [growth] compared favorably with growth rates achieved through 2017."
The research firm continues: "Revenue growth at Microsoft, Google, and Alibaba again far surpassed overall market growth rate, so all three gained market share with Microsoft, in particular, jumping ahead. Market leader Amazon maintained its dominance and remains bigger than its next four competitors combined. Its sheer scale prevents it from growing as fast as the chasing pack, but it still managed to nudge up its market share a percentage point to a little over 34%. The market share gains of these four came at the expense of small-to-medium sized cloud operators.
While many of those smaller providers are seeing consistent revenue growth, they are lacking the scale and financial muscle of the leaders and are unable to keep pace with their larger competitors. Meanwhile, IBM market share dropped off the pace a little but remained at comfortably over 7%, thanks primarily to its strong leadership in hosted private cloud services."
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Synergy estimates quarterly cloud infrastructure service revenues are "well over $17 billion." That includes infrastructure- and platform-as-a-service, as well as hosted private cloud.
"The Q3 growth rate of 45% compares with a full-year 2017 growth rate of 44% and a 2016 growth rate of 50%. Public IaaS and PaaS services account for the bulk of the market, and those grew by 51% in Q3. In the public cloud, the dominance of the top five providers is even more pronounced, as they control almost three-quarters of the market. Geographically, the cloud market continues to grow strongly in all regions of the world," Synergy says.
— Mitch Wagner Executive Editor, Light Reading
Executive Editor, Light Reading
San Diego-based Mitch Wagner is many things. As well as being "our guy" on the West Coast (of the US, not Scotland, or anywhere else with indifferent meteorological conditions), he's a husband (to his wife), dissatisfied Democrat, American (so he could be President some day), nonobservant Jew, and science fiction fan. Not necessarily in that order.
He's also one half of a special duo, along with Minnie, who is the co-habitor of the West Coast Bureau and Light Reading's primary chewer of sticks, though she is not the only one on the team who regularly munches on bark.
Wagner, whose previous positions include Editor-in-Chief at Internet Evolution and Executive Editor at InformationWeek, will be responsible for tracking and reporting on developments in Silicon Valley and other US West Coast hotspots of communications technology innovation.
Beats: Software-defined networking (SDN), network functions virtualization (NFV), IP networking, and colored foods (such as 'green rice').
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