The worldwide infrastructure as a service (IaaS) market grew 40.7 per cent from $45.7 billion to $64.3 billion in 2020, according to Gartner, Inc. Amazon continued to lead the IaaS market in 2020, followed by Microsoft, Alibaba, Google, and Huawei.
Nearly 90 per cent of all IaaS providers exhibited growth in 2020, with the top five IaaS providers accounting for 80% of the market, the report said.
Amazon continued to lead the worldwide IaaS market with $26.2 billion of revenue in 2020 and a 41 per cent market share. Amazon’s 28.7 per cent growth was slightly slower than that of the market, with their sales growth primarily reflecting increased customer usage.
Microsoft maintained the No. 2 positions in Gartner’s IaaS market share with nearly 60 per cent 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.
Alibaba grew 52.8 per cent in 2020, with revenue exceeding $6 billion, up from $4 billion in 2019. In 2020, Alibaba saw its highest growth rate in the education vertical at 105 per cent, 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 per cent 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 per cent 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,” added Nag.
Google’s IaaS revenue grew 66 per cent 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 multi-cloud model.
Commenting on the development, Sid Nag, research vice president, Gartner, said, “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. 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.”
“The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over,” added 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,” he stated.
