Amazon hits 5-year high in Cloud market

Despite Microsoft's strong growth in Cloud computing services, Amazon reached a five-year high in its share of the cloud infrastructure service market.

Despite Microsoft's strong growth in the Cloud market, Amazon reached a five-year high in its share of the cloud infrastructure service market.

Amazon Web Services (AWS) had 25 per cent revenue growth from the third quarter to the fourth quarter, giving it a 30 per cent global market share in the last quarter of 2014, according to a report from Synergy Research Group. AWS's year-over-year revenue growth was 51 per cent.

Amazon was able to grab that marketshare despite a strong third-quarter push from cloud rival Microsoft , which showed the highest year-over-year revenue growth 96 per cent - last quarter. Microsoft is in second place in the market with about 11 per cent share.

With strong 81 per cent year-over-year revenue growth, Google advanced but was unable to grab the third-place spot from IBM which has about 7 per cent of the market, compared to Google's 5 per cent, noted Synergy Research.

"Many actual or perceived barriers to cloud adoption have now been removed and the worldwide market is on a strong growth trajectory," said John Dinsdale, Synergy's chief analyst and research director, in a statement. "The momentum that has been built up at AWS and Microsoft is particularly impressive. They have an ever-broadening portfolio of services and they are also benefitting from a slowdown in the super-aggressive price competition that was a feature of the first half of 2014."

Synergy estimates that overall quarterly cloud infrastructure service revenues are nearing the $US5 billion mark. Worldwide revenue for all of 2014, which grew 48 per cent year over year, exceeded $US16 billion.

Patrick Moorhead, an analyst with Moor Insights & Strategy, said AWS simply had a head start in the cloud market, putting it in a strong position against competitors newer to the cloud.

"AWS had a five-year head start so this doesn't surprise me at all," he said. "They have the broadest offering of anyone. Companies like Netflix and Instagram have used or are using AWS. If you are building infrastructure from scratch and aren't worried about getting locked into Amazon's API, you must look at them as a possibility."

While Google is doing well in the market, the company doesn't have the enterprise background that Microsoft does, which gives the Redmond, Wash.-based company an edge.

"Microsoft's play is to take their market-leading software and make that scalable for their Azure cloud," Moorhead said. "Microsoft has a lot of legacy companies, not startups, going to the Cloud... Google has had a hard time translating their offering for business use. They don't have the installed base Microsoft has, nor were they first in creating cloud services for businesses like AWS."

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