Newsroom

Press Releases

STAMFORD, Conn., August 1, 2018

Gartner Says Worldwide IaaS Public Cloud Services Market Grew 29.5 Percent in 2017

Analysts to Explore Latest Cloud Trends at the Gartner IT Infrastructure, Operations & Cloud Strategies Conferences in London and Las Vegas

The worldwide infrastructure as a service (IaaS) market grew 29.5 percent in 2017 to total $23.5 billion, up from $18.2 billion in 2016, according to Gartner, Inc. Amazon was the No. 1 vendor in the IaaS market in 2017, followed by Microsoft, Alibaba, Google and IBM.

"The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organizations and as cloud availability expands into new regions and countries," said Sid Nag, research director at Gartner. "Cloud-directed IT spending now constitutes more than 20 percent of the total IT budget for organizations using cloud. Many of these organizations are now using cloud to support production environments and business-critical operations."

In the IaaS market, the competitive landscape is consolidating around the leaders. The top four providers — Amazon, Microsoft, Alibaba and Google — are all hyperscale IaaS providers and represent approximately 73 percent of the total IaaS market and 47 percent of the combined IaaS and infrastructure utility services (IUS) market.

Amazon is the clear leader in the worldwide IaaS market with an estimated $12.2 billion revenue in 2017, up 25 percent from 2016 (see Table 1). The largest of the IaaS providers, Amazon is also the most mature, enterprise-ready provider, with the strongest track record of customer success and the most useful partner ecosystem. Growth in 2017 was driven not only by customers that are migrating from traditional data centers to cloud IaaS, but also by customers implementing transformational digital business projects, reflecting its broad range of use cases.

Table 1.

Worldwide IaaS Public Cloud Services Market Share, 2016-2017 (Millions of U.S. Dollars)


Company

2017

Revenue

2017 Market

Share (%)

2016

Revenue

2016 Market Share (%)

2017-2016 Growth (%)

Amazon

12,221

51.8

9,775

53.7

25.0

Microsoft

3,130

13.3

1,579

8.7

98.2

Alibaba

1,091

4.6

670

3.7

62.7

Google

780

3.3

500

2.7

56.0

IBM

457

1.9

297

1.6

53.9

Others

5,902

25.0

5,392

29.6

9.5

Total

23,580

100.0

18,213

100.0

29.5

Note: While Gartner’s market share methodology remains the same, we are constantly striving to improve our numbers as the market matures. In 2018 we adjusted how we categorize our market share data. This resulted in a more accurate statement of the 2016 IaaS numbers and shows a natural flattening of share distribution. Please take this into account when reviewing 2016 numbers compared to 2017.

Source: Gartner (August 2018)

Microsoft secured the No. 2 position in the IaaS market with growth of more than 98 percent on its IaaS offering, with revenue surpassing $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its Microsoft Azure offering, which is a collection of infrastructure and platform services.Source: Gartner (August 2018)

In the third spot, Alibaba's 2017 growth of 63 percent reflects the company's successful investment in research and development (R&D). Alibaba has the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to the global hyperscale cloud providers in select regions.

"This reflects a fundamental change in what and how organizations are consuming technology. Some legacy infrastructure offerings, such as IUS, are seeing lower and slower uptake that impacts the combined IaaS and IUS market," Mr. Nag said. "Additionally, a groundswell of demand for cloud-skilled personnel is forcing technology providers to change how they compete to meet this exploding demand."

Gartner clients can learn more in the report "Market Share Analysis: IaaS and IUS, Worldwide, 2017."

Gartner Global IT Infrastructure, Operations & Cloud Strategies Conference

Gartner analysts will provide additional analysis on cloud strategies and infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies Conference taking place November 26-27 in London and December 3-6 in Las Vegas. Follow news and updates from these events on social media using #GartnerIO.

About Gartner

Gartner, Inc. (NYSE: IT), is the world’s leading research and advisory company and a member of the S&P 500. We equip business leaders with indispensable insights, advice and tools to achieve their mission-critical priorities today and build the successful organizations of tomorrow.

Our unmatched combination of expert-led, practitioner-sourced and data-driven research steers clients toward the right decisions on the issues that matter most. We are a trusted advisor and objective resource for more than 15,000 organizations in more than 100 countries — across all major functions, in every industry and enterprise size.

To learn more about how we help decision makers fuel the future of business, visit gartner.com.

Contacts