see more blog

Cloud Infrastructure market grew by 25%, reaching 129 billion USD in 2020


The following article is aggregated by VTI Cloud from data from Synergy Research Group (an IT and Cloud market research group) on the Cloud Infrastructure market.

The cloud infrastructure market has grown to 129 billion USD in 2020, compared to 97 billion USD in 2019. Synergy said the market hit 37 billion USD in revenue in the fourth quarter, up 35 percent from the same period last year.

The cloud infrastructure market in 2020 is seen as reflecting society, with the growth in revenue of companies in the richest group such as Amazon, Microsoft, Alibaba, Google and the sharp decline in revenue and even bankruptcy of some small and medium-sized businesses in the market.

Digital transformation during and after the COVID pandemic has helped the cloud infrastructure market grow strongly

VTI Cloud mentioned that cloud computing will accelerate the digital transformation of businesses in Forrester’s prediction article, read more at Forrester predicts 2021: Cloud computing accelerates business transformation after covid | VTI CLOUD

The digital transformation process has brought “a strong wave of business movement” to the cloud. This led to steady growth in revenue of well-known cloud service providers such as Amazon or Microsoft.

cloud provider market share

The market in 2020 has a change in market share. The “top 3” remained Amazon (~33% of the market), Microsoft (continuous growth, reaching 20% in the fourth quarter of 2020) and Google (9%), and Alibaba made a strong breakthrough over IBM (~4%) rose to fourth place with 6%.

Stability of Amazon Web Services growth and revenue

Amazon is an interesting case in that it has reached a record high of about 33% for four consecutive years (according to Synergy data) that no rival has usurped.

In 2020, Q4 alone, AWS collected 12.74 billion USD in revenue, resulting in more than 50 billion USD in revenue over the year. Extra Crunch’s illustration below shows how terrible the “monetizing” speed of Amazon’s cloud service is.

aws growth revenue

AWS stays on Top 01 for 10 years

AWS has been a great success story for over 10 years now, and they remain in an extremely strong position in the market despite growing competition from many strong companies in the IT industry. It’s a great testament to both Amazon and the AWS leadership team no matter what period of the leadership apparatus.

With Microsoft, Google, Alibaba, and other providers

With 20% of the market, Microsoft has total revenue of 37 billion USD, and in the fourth quarter of 2020 alone, there was revenue growth of 5.9 billion USD (Q4.2019) to 7.4 billion USD.

According to John Dinsdale – Chief Analyst from Synergy:

“Microsoft has always been a formidable aws competitor, but with growth so fast in recent years, Microsoft Azure will encounter the operational and maintenance problem that their competitors – AWS encountered long ago, and have found a solution.”

Google collected 3.3 billion USD, up from 2.98 billion USD in the third quarter of 2020, and Alibaba made 2.22 billion USD, up from 1.65 billion USD in the same time frame.

Meanwhile, the market share at the bottom of cloud infrastructure continues to decline even as the cloud computing market continues to expand significantly. Synergy wrote in a statement: “Those who lost market share are a large group of smaller cloud providers who have lost 13% market share in the last 16 quarters.”

However, according to Synergy, these small cloud providers will focus on specific niches or markets (business by geography, certain types of services such as hybrid cloud, private cloud according to customer needs). But it can also be said that the smaller the piece of cake will be, the more difficult it will be for cloud service providers to launch in the later.

Cloud Infrastructure accounts for only a small proportion of global IT spending

According to Gartner’s predictions, global spending on IT reached 3.6 trillion USD. With a market for cloud infrastructure of 129 billion USD (Synergy report), this market accounts for only 3.58% of total IT consumption in 2020, a figure that is too small!

This figure shows that the cloud market is extremely lucrative, the figure of tens of billions of Dollars of revenue will be increased rapidly in the coming years.

Reference

About VTI Cloud

VTI Cloud is an Advanced Consulting Partner of AWS Vietnam with a team of over 50+ AWS certified solution engineers. With the desire to support customers in the journey of digital transformation and migration to the AWS cloud, VTI Cloud is proud to be a pioneer in consulting solutions, developing software, and deploying AWS infrastructure to customers in Vietnam and Japan.

Building safe, high-performance, flexible, and cost-effective architectures for customers is VTI Cloud’s leading mission in enterprise technology mission.

Related news

what’s up at VTI