Cloud services market set to near $350bn by 2021 says IHS Markit; AWS’ IaaS dominance continues

With AWS re:Invent just around the corner, another piece of research which affirms Amazon’s top position in the cloud infrastructure biz; IHS Markit says the company secured more than a quarter of total infrastructure as a service (IaaS) revenue in the first half of 2017.

Total revenues for what IHS defines as off-premises cloud services – IaaS, PaaS, SaaS and the curious ‘cloud as a service’ (CaaS) – grew 26% year over year to total $72 billion (£54.4bn), while IBM took first place for SaaS revenue, grabbing 19% of the market. By 2021, this number is forecast to hit $343 billion, at a CAGR of 22%.

In terms of trends fuelling cloud providers’ strategies, IHS argues CSPs are ‘continually looking for ways to innovate by integrating machine learning and artificial intelligence techniques into their services.’ Alongside this, container technologies were cited – as was the importance of partnerships in what can be considered a relatively mature ecosystem.

“The competitive landscape has changed as off-premises cloud service providers establish strong relationships with key companies that have large enterprise customer bases,” wrote Cliff Grossner and Devan Adams, IHS Markit analysts. “Providers cannot depend on mergers and acquisitions as their sole paths to growth.”

Key partnerships cited include IBM and VMware’s deals, as well as the move by Google, Pivotal and VMware to launch Pivotal Container Services (PKS), enabling enterprises and service providers to use Kubernetes on VMware vSphere and Google Cloud Platform. On the acquisition side, Rackspace’s buy of Datapipe was cited – officially completed last week – as was Digital Realty’s merger with DuPont Fabros in the data centre realm.

AWS re:Invent, taking place from November 27 to December 1, will see a litany of news from the major players, the partners and the hangers-on. As for the company itself, the most recent financial analysis from Synergy Research argued the major players were all progressing as usual, with AWS ‘in a league of its own’ and Microsoft the best of the rest, ahead of Google and Alibaba. Amazon posted total revenue across all segments of $43.74bn for its most recent quarter, with AWS contributing just over 10% of that figure at $4.58bn.

This all dovetails with a recent two-part opinion article from Robert X. Cringely, the first of which detailing how cloud computing has reached its tipping point, and the second opining on how Amazon will become the new Microsoft – or rather, the old, pre-Satya Nadella walled garden Microsoft.

You can find out more about the IHS Markit report here (subscription required).

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