The cloud computing market has recorded tremendous growth to emerge as a billion-dollar industry in recent years. With consumers increasingly focusing on shifting towards the cloud, several service providers are striving to account for the highest share of the broad market.
Data presented by Finbold indicates that Amazon Web Services (AWS) accounts for the largest share of cloud infrastructure service providers at 33%. Microsoft’s Azure platform ranks second with a share of 21%, followed by Google Cloud at 10%. Notably, despite Google and Microsoft emerging as significant players in the cloud computing space, their combined market share still trails AWS.
Elsewhere, Alibaba Cloud has a share of 6% to emerge as the first top provider outside North America. IBM closes the top five category with a share of 4%. Data on cloud infrastructure market share is provided by Synergy Research Group.
Drivers for market dominance by Amazon
The cloud computing segment has recently accelerated amid a shift to digital products mainly powered by the impacts of the coronavirus pandemic. Amid the shift towards digital solutions, enterprises are increasingly considering the cloud as a vital digital transformation engine and a technology that improves business continuity. Furthermore, the growth of cloud computing has resulted in the providers emerging as cash cows for their parent companies.
With the impact of the pandemic, service providers that have focused on offering office productivity tools business analysis suites have stood to gain more users, moving beyond the essential cloud infrastructure services.
Although most of the leading service providers offer similar products, some have banked on unique fundamental drivers to emerge top. In this case, leading providers like AWS have deployed various tactics like aggressive investments that have expanded its network while lowering prices to reach more consumers.
Additionally, AWS has the edge over competitors due to the platform’s ability to offer convenient
and efficiently scalable solutions that have attracted a diverse customer base alongside an extensive network of partners. For instance, AWS has noted that its customers mainly comprise enterprises, governments, educational and research institutions alongside startup and digital-native customers.
Although AWS has a steady lead over its rivals, Microsoft and Google are catching up through accelerated innovation around machine learning and artificial intelligence (AI) programs. Notably, AWS is considered to lag AI, a key growing cloud computing element.
Elsewhere, AWS has recently faced significant outages that have sent panic across the market. Such incidents might prompt users to opt for other providers since disruptions highlight the danger of relying on one service provider. The recent notable outage was recorded in December 2021 due to loss of power in a data center in the US, which caused knock-on problems affecting a range of popular online services.
A spot check of the providers shows North America is a dominant region, which can be tied to high cloud computing adoption due to factors like the presence of many enterprises with advanced IT infrastructure. Additionally, the area hosts technical expertise. However, the Asia market is also expected to catch up and offer significant growth opportunities for cloud computing vendors.
Criticism of top cloud infrastructure providers
The dominance of Amazon, Microsoft, and Google has also come under criticism, especially from the antitrust perspective. Notably, critics have blasted firms like Amazon for abusing their market share control by engaging in anticompetitive behavior. For instance, the Federal Trade Commission is reportedly finalizing its long antitrust investigation into AWS.
Additionally, with the amount of data processed by the cloud computing providers, the systems are open to cyberattacks like the cloud malware injection. Notably, cloud computing solutions guarantee security, flexibility, scalability, and agility.