The worldwide IaaS public cloud market soared by 31% in 2016 to total US$22.1 billion, up from US$16.8 billion in 2015, Gartner reports.
Gartner says Amazon is now the clear leader in the IaaS market with 44.2% of the market, achieving this position by serving the most customers across the broadest range of use cases – from cloud-native startups, to midmarket businesses wanting to lift and shift traditional applications, to enterprises executing transformational migrations to the cloud.
According to Gartner, within the IaaS market, there is significant above-market growth for the big three hyperscale IaaS cloud providers – and while Amazon Web Services dominated the market in 2016, Microsoft Azure gained more momentum, and Google made some gains.
Looking forward, Gartner says that while competitive pressures increase, Amazon will witness growth erosion in share, as the non-hyperscale providers struggle to provide value through their services, while other IaaS market leaders will see an increase in growth.
Microsoft secured the No. 2 position in the IaaS market with 7.1% market share, a whopping increase of 61.1% over 2015, with the company solidifying its position as a leading IaaS provider through focused investment in the development of IaaS capabilities and in solid sales and marketing execution.
Gartner says that Alibaba’s third spot in the IaaS rankings was on the back of 2016 growth of 127% and reflects the company's position as the current volume leader and dominant player in the cloud services market in China.
And, actively expanding its international footprint, Alibaba also announced in 2016 the launch of four new data centres located in Europe, Australia, the Middle East and Japan.
"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," said Sid Nag, research director at Gartner.
"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 is expected to show the fastest growth over the next five years.
"The worldwide public cloud service market growth continues, driven by digital business initiatives, data centre consolidations and application migrations to the cloud.
"Technology strategic planners must build both relevant offerings and partner-based ecosystems to seize the opportunity."