AWS and Azure take up half of the cloud market

Overall cloud sales heading for $100 billion per year as the market continues to grow

AWS sign

Spending on cloud services has grown almost 40% in the second quarter of 2019, with AWS and Microsoft Azure claiming half of the market.

Overall, the cloud market is heading for a world-wide revenue run rate of $100 billion per year, according to Synergy Research Group, with AWS taking up 33% of the that and Microsoft someway off in second with 16%.

AWS actually posted a slight slip in net sales with 37% growth compared to the same time last year. Despite going from $6.105 to $8.381 billion when compared to the second quarter of 2018, it's the first time in over five years that its net sales have dropped below 40%.

However, not only is AWS still a large chunk of Amazon's overall revenue (13%), it's still bigger than the next four providers, Microsoft, Google, Alibaba and IBM, combined.

"When quarterly spend on cloud services is mapped out for the last twelve quarters, we are pretty much looking at a steep, straight-line growth profile," said John Dinsdale, a chief analyst at Synergy.

"Amazon is maintaining its leadership position in the market, though growth at Microsoft is also noteworthy. In early 2016 Microsoft was less than a quarter the size of Amazon in this market, while today it is getting close to being half the size. These two cloud providers alone account for half of all money spent on cloud infrastructure services, which is impressive for such a high-growth, strategically important market."

Microsoft's public cloud computing platform, Azure, has firmly established itself as the second-place cloud provider, recently posting revenue growth of 63%.

Google Cloud, which holds 8% of the overall market, is generating $8 billion a year in run-rate according to parent company Alphabet's latest earnings. The company also plans to invest in its sales force as it looks to close the gap on Microsoft and AWS.

IBM recently reported a drop in revenue, partly attributed to its acquisition of Red Hat but there is a suggestion that the open-sourced specialist is a big part of the IBM's cloud strategy.

Alibaba, Salesforce, Oracle, Tencent and Rackspace made up the remaining market share with a combined 14%.

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