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Cloud market ends year with a bang

Written by Tue 4 Feb 2020

Almost every major cloud provider has released its quarterly earnings report for Q4. Now that the dust has settled –  how did the big players fare?

It’s a lucrative market, is cloud computing. Something you’re reminded of every quarter when the tech world’s finest flash their quarterly earnings reports.

Last quarter, more records came tumbling down. This time, the combined might of the cloud kingpins saw to it that the market posted the highest quarterly cloud infrastructure spending increase in its brief but explosive history.

The folks at Synergy Research crunched the numbers, not us. By its researchers’ estimates, Q4 spending on cloud infrastructure services (including IaaS, PaaS and hosted private cloud services) was up $2.8 billion on the previous quarter – “by far the biggest quarterly increment the market has seen.”

Total cloud infrastructure revenues were well over $27 billion, taking revenues for the whole year over $96 billion – making the 2019 market twice the size of 2017’s. Public IaaS and PaaS services account for the bulk of the market and those grew by 38 percent in Q4.

Synergy said we shouldn’t read too much into the market’s slowing 37 percent year-on-year growth rate, which simply reflects the “massive scale of the market which forces growth rates to moderate.”

Microsoft enjoyed a healthy 2019, securing several lucrative cloud contracts (not least the $10bn Jedi deal – if it goes ahead). The company is still way behind’s Amazon’s 33 percent market share, but cloud chief Scott Guthrie will be pleased with his unit’s 3 percentage point market share increase during 2019 (from 15 to 18 percent.)

Google, Alibaba, and Tencent are still going strong and biting at the ankles of the two market leaders. All three saw revenues increase by 50 percent or more year on year, significantly outperforming the market as a whole.

“The year ended with a bang as Amazon and Microsoft both posted big sequential gains in cloud revenues,” said John Dinsdale, a chief analyst at Synergy Research Group.

“Thanks to these two market leaders and strong growth from some other cloud providers, the 2019 market was over twice the size of the 2017 market. Given secular trends in the market we will continue to see strong growth. We will also see a continuing battle for market position between the global giants and smaller cloud providers that have a more focused geographic or service footprint.”

 

Written by Tue 4 Feb 2020

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