Microsoft narrows the gap on Amazon Web Services (AWS) as ​cloud computing race heats up

Amazon Web Services (AWS) continues to dominate the cloud computing infrastructure-as-a-service market, but Microsoft's Azure is growing fast.

The worldwide infrastructure-as-a-service (IaaS) market grew 29.5 percent in 2017 to total $23.5 billion, up from $18.2 billion in 2016, according to calculations by tech analyst firm Gartner. Companies are increasingly handing over their data and applications to cloud services providers; the analyst group recently predicted that, as a result, 80 percent of enterprises will have shut down their traditional data centers by 2025 -- up from just 10 percent today.

SEE: Special report: The art of the hybrid cloud (free PDF)

Amazon Web Services was the top vendor in the IaaS market in 2017, followed by Microsoft, Alibaba, Google and Rackspace.

Sid Nag, research director at Gartner, said spending on cloud computing now accounts for more than 20 percent of the total IT budget for organizations which are using it, and cloud services are now being used to support production environments and business-critical operations.

In the IaaS market, the four big players are also grabbing a larger share of total revenue as the market starts to consolidate. AWS, Microsoft, Alibaba and Google represent nearly three quarters (73 percent) of the total IaaS market and 47 percent of the combined IaaS and infrastructure utility services (IUS) market.

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Source: Gartner

Amazon is the clear leader in the worldwide IaaS market with an estimated $12.2 billion revenue in 2017, up 25 percent from 2016. Gartner said customers migrating from traditional data centers to cloud IaaS, and customers working on digital transformation projects helped boost AWS revenues.

But Microsoft saw rapid growth in its Azure service, with revenue nearly doubling to reach $3.1 billion in 2017. Alibaba held onto the third spot, which Gartner said reflects the company's successful investment in research and development.

SEE: Cloud v. data center decision (ZDNet special report) | Download the report as a PDF (TechRepublic)

"Alibaba has the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to the global hyperscale cloud providers in select regions," Gartner said.

Separate figures for the worldwide public cloud infrastructure market from Canalys last week also showed AWS grabbing most of the revenue but with Microsoft Azure and Google Cloud growing faster than the market leader.

AWS still leads in cloud, but Microsoft Azure is catching up.

Source: Canalys
Source: zdnet.com