The global infrastructure as a service (IaaS) public cloud market grew by 31 per cent in 2016 to total $22.1 billion (£16.6 billion), up from $16.8 billion (£12.6) in 2015, according to research by Gartner.
Amazon was the top vendor in the IaaS market in 2016, followed by Microsoft and Alibaba.
Sid Nag, research director at Gartner, said: “The market for cloud services is growing faster than virtually every other IT market today, with much of this growth coming at the expense of the traditional, non-cloud offerings.
“The demand for cloud-based IaaS continues on its path of aggressive growth, and the high growth of IaaS is also driving growth in related cloud markets. While platform as a service (PaaS) and software as a service (SaaS) are also exhibiting strong growth, IaaS is expected to show the fastest growth over the next five years.”
Within the IaaS market, there is significant above-market growth for the big three hyperscale IaaS cloud providers, according to Gartner.
While Amazon Web Services dominated the market in 2016, Microsoft Azure gained more momentum, while Google also made some gains. Gartner has predicted that while competitive pressures increase, Amazon will witness growth erosion in share, as the non-hyperscale providers struggle to provide value through their services. Meanwhile, other IaaS market leaders will see an increase in growth.
Amazon took 44.2 per cent of the market in 2016. According to Gartner, the company achieved this position by serving the most customers across the broadest range of use cases – from cloud-native startups, to mid-market businesses wanting to lift and shift traditional applications, to enterprises executing transformational migrations to the cloud.
Microsoft took second place in the IaaS market, with a 7.1 per cent market share, which was an increase of 61.1 per cent from 2015. Gartner explained that Microsoft “solidified its position as a leading IaaS provider” through focused investment in the development of IaaS capabilities and in solid sales and marketing execution.