The worldwide cloud infrastructure services market grew 37% in Q3 2019 to reach US$27.5 billion. Market leader Amazon Web Services (AWS) retained its dominant position, with growth of US$2.3 billion equal to the year-on-year increase of the next three players combined. But AWS’ rise of 35% represented another consecutive quarter of slowing growth, and it was outpaced significantly by second-place Microsoft Azure, which grew 59%. AWS’ market share slipped, taking it below 33%, while Azure’s rose to 17%. Google Cloud also accelerated, up 69% at US$1.9 billion. This secured its position as one of the frontrunners in the global cloud race.
The global cloud providers are reaching a critical point in their growth strategies, as enterprises of all sizes adopt multi-cloud and hybrid IT models. End-user organizations pursuing cloud-centric initiatives for digital transformation are seeking the best cloud platforms to run specific applications, AI, analytics or general-purpose compute. Many are also keen to balance their investments across more than one cloud provider to spread risk. Microsoft’s highly publicized win over AWS to secure the JEDI cloud contract with the US Defense Department, worth US$10 billion over 10 years, partly reflects the US government’s strategy to spread risk across multiple providers, an approach now adopted by many enterprises.
Google’s strategy to focus on specific applications and verticals, combined with a major investment in internal sales and partner resources, is similarly designed to make it more relevant to enterprise customers and partners, particularly vertically aligned systems integrators. Google has continued to open new cloud data center regions around the world.
AWS remains a formidable leader, and the launch of its Outposts server by the end of 2019 – extending AWS into customer data centers and edge environments for the first time – gives it a powerful weapon in the battle for enterprise awareness in 2020, and for partner attention. At this month’s Canalys Channels Forum in Barcelona, Canalys predicted that AWS will be a top four on-premises server vendor in the US and Western Europe within three years. Partners will play a critical role in sizing and deploying Outposts for hybrid IT customers.