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Gartner says the worldwide infrastructure as a service (IaaS) public cloud market grew 31 per cent in 2016 to total $22.1 billion, up from $16.8 billion in 2015.
Amazon is the number one vendor in the IaaS market in 2016, followed by Microsoft and Alibaba, according to its latest market share analysis of the public cloud.
"The market for cloud services is growing faster than virtually every other IT market today, with much of this growth coming at the expense of the traditional, non-cloud offerings," says Sid Nag, research director at Gartner.
"The demand for cloud-based IaaS continues on its path of aggressive growth, and the high growth of IaaS is also driving growth in related cloud markets.While platform as a service (PaaS) and software as a service (SaaS) are also exhibiting strong growth, IaaS is expected to show the fastest growth over the next five years."
Within the IaaS market, Gartner says there is significant above-market growth for the big three hyperscale IaaS cloud providers.
While Amazon Web Services dominated the market in 2016, Microsoft Azure gained more momentum, and Google made some gains.
Gartner believes that while competitive pressures increase, Amazon will witness growth erosion in share, as the non-hyperscale providers struggle to provide value through their services, while other IaaS market leaders will see an increase in growth.
Amazon is the clear leader in the IaaS market with 44.2 per cent of the market (see Table below). Amazon has achieved this position by serving the most customers across the broadest range of use cases — from cloud-native startups, to midmarket businesses wanting to lift and shift traditional applications, to enterprises executing transformational migrations to the cloud.
Microsoft secured the number two position in the IaaS market with 7.1 per cent market share, an increase of 61.1 per cent over 2015. Microsoft solidified its position as a leading IaaS provider through focused investment in the development of IaaS capabilities and in solid sales and marketing execution, says Gartner.
In the third spot, Alibaba's 2016 growth of 127 per cent reflects the company's position as the current volume leader and dominant player in the cloud services market in China.
Alibaba is also actively expanding its international footprint, with the launch of four datacentres in Europe, Australia, the Middle East and Japan.
"The worldwide public cloud service market growth continues, driven by digital business initiatives, datacentre consolidations and application migrations to the cloud," says Nag, in a statement.
"Technology strategic planners must build both relevant offerings and partner-based ecosystems to seize the opportunity."
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