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Amazon Dominating in the Cloud

Amazon is one of a "Gang of Four" -- the others are Microsoft, IBM, and Google -- that control the cloud hosting market. Amazon and AWS have more than twice the share of runner-up Microsoft.

To the surprise of nobody, Amazon's Amazon Web Services (AWS) is dominating the cloud-scape.

According to a new report from Synergy Research Group, Amazon is part of what you could call a Gang of Four -- the others are Microsoft, IBM, and Google, in that order -- that effectively control the cloud hosting market.

AWS is easily the market leader, with more than twice Microsoft's market share, but Redmond's year-over-year growth (100 percent) in Q2 of 2016 was almost double that of AWS. For the record, Google increased its share by 162 percent (3 times that of AWS), Synergy said.

Smaller Vendors Can't Catch Up

The combined share of all other players in the cloud space (Alibaba, AT&T, British Telecom, CenturyLink, Hewlett-Packard Enterprise, Oracle, RackSpace, and others) is less than that of market leader Amazon.

What's more, the gap between cloud leaders and cloud followers continues to widen. "[T]he big four grew their cloud infrastructure service revenues 68 percent in Q2, while the next 20 largest cloud providers grew by 41 percent and all other smaller providers grew by 27 percent," Synergy said in a statement, noting that overall growth was a robust 51 percent.

"Amazon remains in a league of its own, almost three times the size of its nearest competitor and with a clear lead in all major regions and most segments of the market," the Synergy release said. "Meanwhile Microsoft and Google can point to substantially higher growth rates, while IBM continues to feature strongly thanks primarily to its leadership in the hosted private cloud segment."

"In a variety of ways Amazon and the other big three players have distanced themselves from the competition in this market and continue to widen the gap," said John Dinsdale, a chief analyst and research director at Synergy Research Group, in a prepared release. "What marks them out as different is their global presence, marketing muscle, ability to fund huge investments in hyperscale data centers and, in most cases, a determination to succeed in the market."

Hadoop Part of Amazon's Success

Amazon's Q2 earnings in late July were buoyed by AWS, which accounted for 55 percent of Amazon's total operating income in Q2. According to market watcher Gartner, Amazon already sells more Hadoop capacity and hosts more Hadoop instances than every other commercial player combined -- including Hadoop pure-plays Cloudera, Hortonworks, and MapR Technologies.

This claim also includes vendors such as IBM and Microsoft, which market their own distributions of Hadoop. "There is a helluva lot more Amazon out there than most of us thought. We all kind of knew it was going on but [Amazon was] so opaque in their financial reporting," Gartner vice president Merv Adrian told attendees at last month's Pacific Northwest BI Summit.

According to Dinsdale and Synergy, even though Alibaba, Oracle, and other cloud followers aren't quite out of the running, they have an enormous amount of ground to make up.

"The ranking of the next 20 largest cloud providers features some interesting companies, with Alibaba and Oracle growing particularly strongly, but they are all starting from a long way behind Google, which is itself growing by well over 100 percent per year and yet remains only a sixth the size of Amazon," he said.

About the Author

Stephen Swoyer is a technology writer with 20 years of experience. His writing has focused on business intelligence, data warehousing, and analytics for almost 15 years. Swoyer has an abiding interest in tech, but he’s particularly intrigued by the thorny people and process problems technology vendors never, ever want to talk about. You can contact him at evets@alwaysbedisrupting.com.


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