Cloud Providers Do Battle: AWS Dominates with Microsoft, Google and IBM Softlayer Gaining Ground

The last twenty years in tech has given birth to Google, iTunes, Facebook, the iPhone and the IoT; altering and enriching the lives of consumers around the world.Two decades of innovation in tech has also profoundly impacted the enterprise market, particularly with respect to cloud adoption which is growing year-on-year at a rate of 17%.Emerging in 2006, Amazon Web Services (AWS) led the way early and pursued its cloud computing business vigorously by building strong relationships with those organizations seeking to migrate IT infrastructure from premises to the cloud.This has led to Amazon’s dominance of the cloud market and has allowed the company to comfortably hold the 33% global market share AWS enjoys today.It’s a stunning turnaround for a company that sixteen years ago was struggling to turn a profit and suffocating under a mountain of debt. Back In 2001, the Internet retailer’s share price had fallen by 88%, and critics expected the company to run out of money within a year. Amazon CEO Jeff Bezos’ transformation of the organization is now recognized as visionary, but at the time he was admonished for taking a risky bet with the firm.In its Q1, 2017 earnings call, announced that first quarter sales were up 23% to $35.7 billion with its cloud business growing 43% to $3.7 billion. Whilst AWS' competitors reported higher growth rates in quarter one, AWS' revenues are larger than Microsoft Azure, Google Cloud, IBM Softlayer, Alibaba Cloud and Oracle Cloud combined.Following Amazon's lead, Microsoft was next to enter the cloud arena in 2010, with its existing network of large business contacts giving the software giant a solid start. Microsoft CEO Satya Nadella says the company has nailed hybrid deployment and cloud migration, with a clear transition path from Office and Windows Server to Azure. A poll of 235 IT professionals revealed that Microsoft Azure is now favored over AWS among large enterprises.When Google Cloud officially joined the fray in 2014, the company opted to focus on small to medium-sized businesses rather than attempting to directly go head-to-head with AWS and Microsoft. However, Google is gradually becoming more enterprise-friendly, now counting HSBC and eBay as customers. Diane Greene, Senior Vice President of Google, recently said that the company had its sights set on #1 cloud status within five years, insisting that Google has “a pretty good shot” at the top spot.Despite Amazon’s fortune and current strong market position, Amazon can’t afford to become complacent. The cloud is maturing, and businesses have become more comfortable integrating solutions from a wider range of vendors. So whilst AWS holds the lion’s share of the market, its competitors are nipping at the company’s heels and evolving their business models rapidly in order to gain the competitive edge.

Synergy Graph

Google, Microsoft, Alibaba and Oracle enjoyed significantly higher cloud growth rates of 80% or more in Q1 2017 according to a recent report by Synergy Research Group. Rackspace and Salesforce also feature in Synergy’s index of leading cloud providers, holding a strong presence in niche markets. IBM dominates in hosted private cloud, but lags well behind its rivals in public cloud. Nevertheless, Amazon’s revenue topped $12 billion last year, still greater than its next five competitors combined.With the cloud infrastructure services market projected to grow by 46% this year, reaching $55.8 billion, the data center industry is seeing a rise in demand from enterprise customers for private, direct connections to the major cloud providers.“The demand for data is relentless and enterprises are experiencing incredible pressure to improve performance and deliver a consistent network experience. This is driving the surge in hybrid cloud strategies which allow companies to respond instantly to changes in business needs and scale rapidly,” said Cloudscene’s founder Bevan Slattery.Of the global 187 cloud on-ramps listed on Cloudscene (as launched this month), AWS accounts for 32% with a total of 59 direct connections. Google Cloud holds a 21% share and is followed by IBM SoftLayer and Microsoft Azure both with 16% respectively. The balance is spread across Oracle Cloud, VMWare, Alibaba Cloud and Rackspace.By region, the market share varies between the cloud providers:North America Direct Connection Market Share:

Cloud Direct Connections in North America

Europe Direct Connection Market Share:

Direct Connections in Europe

Asia Pacific Direct Connection Market Share:

Direct Connections Asia Pacific

Equinix was the first data center operator to provide a direct connection to a cloud network in 2010 and their reign continues with Equinix experiencing dramatic growth in connections – up 250% since 2016 - and providing the most private connections worldwide. Equinix is followed by Coresite, Digital Realty, Global Switch and Cologix respectively.Cloudscene can also reveal there are five key colocation hubs that currently deliver more direct connection services than any other city worldwide, these are:

  1. Washington DC
  2. Chicago
  3. Sydney
  4. Dallas
  5. London

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