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STAMFORD, Conn., June 28, 2021

Gartner Says Worldwide IaaS Public Cloud Services Market Grew 40.7% in 2020

Amazon, Microsoft and Alibaba Led the 2020 Race to the Cloud

The worldwide infrastructure as a service (IaaS) market grew 40.7% in 2020 to total $64.3 billion, up from $45.7 billion in 2019, according to Gartner, Inc. Amazon retained the No. 1 position in the IaaS market in 2020, followed by Microsoft, Alibaba, Google and Huawei.

“Hyperscale providers are continuing to build distributed cloud and edge solutions that extend the public cloud’s reach into private and on-premise locations, addressing the needs of organizations relating to data sovereignty, workload portability and network latency,” said Sid Nag, research vice president at Gartner. “This fact, coupled with reliance on the public cloud by a majority of organizations during the pandemic, drove another year of double digital market growth in 2020.”

In 2020, the top five IaaS providers accounted for 80% of the market, and nearly 90% all IaaS providers exhibited growth.

Amazon continued to lead the worldwide IaaS market with $26.2 billion of revenue in 2020 and 41% market share (see Table 1). Amazon’s 28.7% growth was slightly slower than that of the market, with their sales growth primarily reflecting increased customer usage.

Table 1. Worldwide IaaS Public Cloud Services Market Share, 2019-2020 (Millions of U.S. Dollars)


Company

2020

Revenue

2020 Market

Share (%)

2019

Revenue

2019 Market

Share (%)

2019-2020 Growth (%)

Amazon

26,201

40.8

20,365

44.6

28.7

Microsoft

12,658

19.7

7,950

17.4

59.2

Alibaba

6,117

9.5

4,004

8.8

52.8

Google

3,932

6.1

2,367

5.2

66.1

Huawei

2,672

4.2

882

1.9

202.8

Others

12,706

19.8

10,115

22.1

25.6

Total

64,286

100.0

45,684

100.0

40.7

Source: Gartner (June 2021)

Microsoft maintained the No. 2 position in Gartner’s IaaS market share with nearly 60% growth, reaching $12.7 billion in revenue in 2020. The global healthcare crisis and disruption in workplace environments during the pandemic era drove increased demand from existing Microsoft Azure customers to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail.

The dominant IaaS provider in China, Alibaba, grew 52.8% in 2020 with revenue surpassing $6 billion, up from $4 billion in 2019. In 2020, Alibaba saw its highest growth rate in the education vertical at 105%, driven by downloads of Alibaba’s enterprise communication and collaboration platform DingTalk among employees and students working and studying from home.

After its second consecutive year of over 200% growth in the IaaS market, Huawei broke into the top five IaaS vendors for the first time in 2020, with $2.7 billion in revenue. Over 90% of this revenue comes from Greater China, a region that continues to see rapid cloud market growth. “After 2019, Huawei made a hard pivot away from selling equipment to investing heavily in their cloud services business which is starting to yield results,” said Nag.

Google’s IaaS revenue grew 66% to reach nearly $4 billion in 2020. Spending from the retail, government and healthcare sectors helped drive Google’s growth in IaaS in 2020, as did their focus on supporting the development and deployment of cloud applications in both a hybrid and multicloud model.

“The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over,” said Nag. “While the cloud market will continue to grow, the real opportunity for providers comes from growth in cloud-adjacent technology markets such as edge, 5G and AI, as CIOs look to invest in technologies that address their complex and emerging use cases.”

Gartner clients can learn more in the report “Market Share: IT Services, Worldwide 2020.”

Gartner IT Infrastructure, Operations & Cloud Strategies Conferences

Gartner analysts will provide additional analysis on cloud strategies and infrastructure and operations trends at the Gartner IT Infrastructure, Operations & Cloud Strategies Conferences taking place November 22-23 in London, December 1-2 in Tokyo, and December 6-8 in Las Vegas. Follow news and updates from these conferences on Twitter using #GartnerIO.

About Gartner for High Tech

Gartner for High Tech equips tech leaders and their teams with role-based best practices, industry insights and strategic views into emerging trends and market changes to achieve their mission-critical priorities and build the successful organizations of tomorrow. Additional information is available at www.gartner.com/en/industries/high-tech. Follow news and updates from Gartner for High Tech on Twitter and LinkedIn using #GartnerHT.

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