Amazon Web Services Still Leading Cloud Market

By Victor Thomson , Feb 03, 2017 02:02 AM EST
Visitors arrive at the cloud pavilion of Amazon Web Services at the 2016 CeBIT digital technology trade fair on the fair's opening day on March 14, 2016 in Hanover, Germany. (Photo : Sean Gallup/Getty Images)

Amazon announced on Thursday, Feb. 2, earnings for its Amazon Web Services (AWS) cloud division, showing earnings of $3.53 billion on an impressive $14.2 billion run rate and a growth of 47 percent. These astonishing results demonstrate that AWS continues to dominate the cloud.

AWS Is Leading The Cloud Market

According to Tech Crunch, even as Oracle, Google, IBM, Microsoft, IBM and even Alibaba continue to boast big cloud growth numbers, in terms of market share they aren't getting much closer to AWS' success. The explanation is that, right now, the market itself is growing at an astounding rate even as these companies continue gaining revenue.

According to The Guardian, the Amazon Web Services or AWS division is the section of the company that is selling cloud computing services to both Amazon itself and the outside world. AWS clients can buy bandwidth to host a website, storage space to hold a huge database or processing power to run complex software remotely. It allows individuals and companies to avoid the hassle of buying and running their own hardware.

For the last year, IDC forecasted a public cloud market of $95 billion. In just three years, it is expected that market to more than double, reaching $195 billion by the year 2020. If the prediction is even close to being right, the cloud market has a huge potential to grow.

Other market predictions are even more optimistic on overall cloud market size. For instance, Forrester is forecasting by 2020 a public cloud market of $236. It is expected the market to grow rapidly, whatever the number turns out to be.

For the vendors that fight over market share, that's good news. However, it doesn't necessarily mean that AWS will lose its supremacy on the cloud market anytime soon. More than a decade ago, Amazon was the first to come with the notion of public cloud Infrastructure as a Service. For several years after that, nobody even started to challenge Amazon Web Services.

AWS' Future On Cloud Market

According to  Synergy Research, AWS has today a huge market share lead. This it makes it very difficult for anyone to catch them. In the short term, at least, no one can challenge its leadership because AWS is far ahead of the rest.

Amazon Web Services is continuing to innovate at a rapid rate, making great investments in infrastructure and expanding its range of services. AWS has the long-term backing of Amazon and continues to grow its business with enterprises. The mix of business logic and math supports the conclusion that AWS cannot be matched anytime soon from a market share and a scale perspective.

Market analysts continue to expect impressive numbers from all the public cloud vendors, but other companies' growth is not coming at the expense of AWS. Amazon Web Services will continue to add new functionality and services and to grow its market share at a rapid rate. Even well-positioned companies as Google and Microsoft will have a hard time to make a significant claim in that market share for some time to come.

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