- Microsoft Corp., continues to narrow the gap with cloud services front-runner Amazon.com Inc., nearly doubling its share of the infrastructure-as-a-service market last year.
- Microsoft, which delivers IaaS through Azure, gained ground by surpassing $3.1 billion in revenue from IaaS – an increase of 98.2% from 2016.
Microsoft’s share of the market expanded to 13.3% in 2017, from 8.7% a year earlier
Microsoft Corp., continues to narrow the gap with cloud services front-runner Amazon.com Inc., nearly doubling its share of the infrastructure-as-a-service market last year, in part by selling more companies on a hybrid cloud approach, Gartner reports.
While Amazon’s cloud division, Amazon Web Services, maintains a commanding lead in the public cloud infrastructure market, with $12.2 billion in revenue in 2017, its market share slipped to 51.8%, from 53.7% in 2016, according to the information-technology firm’s latest analysis.
Microsoft, which delivers IaaS through Azure, gained ground by surpassing $3.1 billion in revenue from IaaS – an increase of 98.2% from 2016.
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That expanded its share of the market to 13.3%, from 8.7% a year earlier, making it the second-largest provider behind Amazon, Garter said.
Microsoft credits that growth to enterprise customers, saying more than 95% of Fortune 500 companies have at least one Microsoft cloud enterprise service and over 75% have at least three: “Azure offers a variety of services that help companies enable, connect and manage both on-premises and cloud environments creating a truly hybrid infrastructure,” a Microsoft spokeswoman told CIO Journal.
Gou Rao, chief technology officer at software-storage firm Portworx Corp., said the company started using Microsoft cloud infrastructure services about a year ago, in addition to a mix of Amazon services, an on-premise data center and a few smaller cloud providers.
“Microsoft always had very strong enterprise account relationships,” Mr. Rao said, “so it makes it very easy and trustworthy to use.”
Like many firms, he added, the Los Altos, Calif., business does not want get locked into any one cloud vendor, in order to stay flexible in negotiating contracts and prices: “We’re hedging our bets a bit.”
The other top public-cloud infrastructure providers identified in the report were Alibaba Group Holding Ltd., Alphabet Inc.’s Google, and International Business Machines Corp.
All told, the global IaaS market grew 29.5% in 2017, to a total of $23.5 billion, up from $18.2 billion the previous year.
Competition in the IaaS market is consolidating around a handful of leaders, with Amazon, Microsoft, Alibaba and Google accounting for about 73% of the total market and nearly half of the combined IaaS and infrastructure utility services market, Gartner said.
“Cloud-directed IT spending now constitutes more than 20% of the total IT budget for organizations using cloud,” Gartner research director Sid Nag said in a research note. “Many of these organizations are now using cloud to support production environments and business-critical operations,” he said.
Microsoft last month reported that it topped $100 billion in annual revenue, as it repositions itself to capture an ever larger piece of the booming cloud market. Much of the company’s recent growth has come from hybrid-cloud computing that allows corporate customers to run Microsoft software in their own data centers as well as a range of cloud services.
In an earnings call with analysts, Chief Executive Satya Nadella cited Microsoft’s “hybrid value proposition” as a reason for its quarterly growth.
Walmart Inc. last month announced a five-year deal to use Microsoft cloud services for new digital capabilities, including algorithms for purchasing and sales-data sharing with vendors. Mr. Nadella at the time said the two companies shared a rivalry with Amazon that “is absolutely core” to the deal.
A separate study last month by Goldman Sachs Group Inc. reported that chief information officers at large public firms expect to run 34% of workloads in public clouds by 2019, up from 18% today.
The report also said 56% of these firms currently use Amazon Web Service for cloud infrastructure services, compared to 49% using Microsoft’s Azure.
Asked which cloud services they expected to be using within the next three years, the companies were split evenly between Amazon and Microsoft, the report said.
Date: August 8, 2018
Source: WSJ