Home Just In IaaS Public Cloud Services Market Grew 40.7% in 2020

IaaS Public Cloud Services Market Grew 40.7% in 2020

by CIO AXIS

The worldwide infrastructure as a service (IaaS) market grew 40.7% in 2020 to total $64.3 billion, up from $45.7 billion in 2019, according to Gartner, Inc. Amazon retained the No. 1 position in the IaaS market in 2020, followed by Microsoft, Alibaba, Google and Huawei.

“Hyperscale providers are continuing to build distributed cloud and edge solutions that extend the public cloud’s reach into private and on-premise locations, addressing the needs of organizations relating to data sovereignty, workload portability and network latency,” said Sid Nag, research vice president at Gartner. “This fact, coupled with reliance on the public cloud by a majority of organizations during the pandemic, drove another year of double digital market growth in 2020.”

In 2020, the top five IaaS providers accounted for 80% of the market, and nearly 90% all IaaS providers exhibited growth.
Amazon continued to lead the worldwide IaaS market with $26.2 billion of revenue in 2020 and 41% market share. Amazon’s 28.7% growth was slightly slower than that of the market, with their sales growth primarily reflecting increased customer usage.

Microsoft maintained the No. 2 position in Gartner’s IaaS market share with nearly 60% growth, reaching $12.7 billion in revenue in 2020. The global healthcare crisis and disruption in workplace environments during the pandemic era drove increased demand from existing Microsoft Azure customers to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail.

The dominant IaaS provider in China, Alibaba, grew 52.8% in 2020 with revenue surpassing $6 billion, up from $4 billion in 2019. In 2020, Alibaba saw its highest growth rate in the education vertical at 105%, driven by downloads of Alibaba’s enterprise communication and collaboration platform DingTalk among employees and students working and studying from home.

After its second consecutive year of over 200% growth in the IaaS market, Huawei broke into the top five IaaS vendors for the first time in 2020, with $2.7 billion in revenue. Over 90% of this revenue comes from Greater China, a region that continues to see rapid cloud market growth. “After 2019, Huawei made a hard pivot away from selling equipment to investing heavily in their cloud services business which is starting to yield results,” said Nag.

Google’s IaaS revenue grew 66% to reach nearly $4 billion in 2020. Spending from the retail, government and healthcare sectors helped drive Google’s growth in IaaS in 2020, as did their focus on supporting the development and deployment of cloud applications in both a hybrid and multicloud model.

“The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over,” said Nag. “While the cloud market will continue to grow, the real opportunity for providers comes from growth in cloud-adjacent technology markets such as edge, 5G and AI, as CIOs look to invest in technologies that address their complex and emerging use cases.”

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