IDC: Microsoft Azure now tied with AWS as top global cloud services provider

The public cloud services market grew over 24% year-on-year in 2020 to $312 billion, according to the latest study from IDC [1.]. The cloud services market includes Infrastructure as a Service (IaaS), System Infrastructure Software as a Service (SISaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).
Note 1.  IDC’s Worldwide Semiannual Public Cloud Services Tracker® monitors the evolving and shifting competitive dynamics of the public cloud services market. It tracks and measures the individual public cloud services providers’ historical business performance and forecasts five years into the future — across 53 geographies and up to 80 discrete market segments. This extensive coverage of vendor share information enables both global and local players to benchmark themselves in terms of business growth and market penetration. Software vendors, systems integrators, value-added resellers, distributors, investors, and other users will be able to keep track of the market performance of main competitors such as Salesforce, Oracle, Google, Microsoft, and Amazon Web Services as well as identify the newcomers to the market and measure the impact and potential of those new players on the competitive landscape.

Spending continued to consolidate in 2020 with the combined revenue of the top five public cloud service providers (Amazon Web Services (AWS), Microsoft (Azure),, Google, and Oracle) increased their spending by 32% and captured 38% of the worldwide total market.

Thanks to an expanding portfolio of SaaS and SISaaS offerings, Microsoft now shares the top position with Amazon Web Services in the whole public cloud services market with both companies holding 12.8% revenue share for the year.

“Access to shared infrastructure, data, and application resources in public clouds played a critical role in helping organizations and individuals navigate the disruptions of the past year,” said Rick Villars, group vice president, Worldwide Research at IDC. “In the coming years, enterprises’ ability to govern a growing portfolio of cloud services will be the foundation for introducing greater automation into business and IT processes while also becoming more digitally resilient.”

While the overall public cloud services market grew 24.1% in 2020, consistent with the past four years, the IaaS and PaaS segments have consistently grown at much faster rates. This highlights the increasing reliance of enterprises on a cloud foundation built on cloud infrastructure, software defined data, compute and governance solutions as a Service, and cloud-native platforms for application deployment for enterprise IT internal applications. IDC expects spending on foundational cloud services (especially IaaS and PaaS) to continue growing at a higher rate than the overall cloud market as resilience, flexibility, and agility guide IT platform decisions.

“Cloud service providers are rapidly expanding their portfolio of infrastructure and platform services to address confidential computing, performance intensive computing, and hybrid deployment scenarios,” said Dave McCarthy, vice president, Cloud and Edge Infrastructure Services. “Extending these foundational cloud services to customer premises and communications networks enables a broader set of use cases than previously possible.”

“The high pace of growth in PaaS, IaaS, and SISaaS, which combined account for about half of the public cloud services market, reflects the demand for solutions that accelerate and automate the development and delivery of modern applications” said Lara Greden, research director, Platform as a Service. “As organizations adopt DevOps approaches and align according to value streams, we are seeing PaaS, IaaS, and SISaaS solutions become increasingly adopted and, at the same time, grow in the range of services and thus value they provide. Innovations in edge and IoT use cases are also contributing to the faster rates of growth in these markets.”

“SaaS applications are the largest and most mature segment of public cloud with 2020 revenues of $148 billion. Organizations across industries hastened the replacement of legacy business applications with a new breed of SaaS applications that is data-driven, intuitive, composable, and ideally suited for more distributed cloud architectures. Organizations looking for industry-specific applications can choose from a growing assortment of vertical applications. The SaaS apps market is dominated by a longtail of providers that account for 65% of the total market,” said Frank Della Rosa, research director, SaaS and Cloud Software.

Worldwide Public Cloud Services Revenue and Year-over-Year Growth, Calendar Year 2020 (revenues in US$ billions)

Segment 2020 Revenue Market Share 2019 Revenue Market Share Year-over-Year Growth
IaaS $67.2 21.5% $50.2 19.9% 33.9%
SaaS – System Infrastructure Software $49.2 15.7% $40.2 16.0% 22.4%
PaaS $47.6 15.2% $36.1 14.4% 31.8%
SaaS – Applications $148.4 47.5% $125.2 49.7% 18.6%
Total $312.4 100% $251.7 100% 24.1%
Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H20

Looking at the segment results, a combined view of IaaS, SISaaS, and PaaS spending is relevant because it represents the foundational set of services that end customers and SaaS companies consume when running, modernizing, building, and governing applications on shared public clouds. In the combined IaaS, SISaaS and PaaS market, the top 5 companies (Amazon Web Services, Microsoft, Google, Alibaba, and IBM) captured over 51% of global revenues. But there continues to be a healthy long tail, representing nearly half the market total. These are companies with targeted use case-specific PaaS services or cross-cloud compute, data, or network governance services. The long tail is even more pronounced in SaaS, where customers growing focus on specific outcomes ensures that over two thirds of the spending is captured outside the top five.

For more information about IDC’s Worldwide Semiannual Public Cloud Services Tracker, please contact Kathy Nagamine at 650-350-6423 or [email protected]

5 thoughts on “IDC: Microsoft Azure now tied with AWS as top global cloud services provider

  1. Reinhardt Krause of Investors Business Daily:

    Cloud Computing: Amazon Leads In Data Center Spending:
    Based on first-quarter earnings reports, 2021 is shaping up as another big year for cloud capital spending. But again, it’s still largely guesswork for analysts.

    Take Amazon Web Services (AWS), the biggest provider of cloud computing services. Its March-quarter capital spending blew past estimates, jumping 78% to $12.1 billion from a year earlier.

    Not all of that was cloud-related, though. Some of that went toward Amazon’s fulfillment centers, logistics and product distribution network.

    Morgan Stanley analyst Katy Huberty addressed the issue in a recent note to clients:
    “Estimates from (market researcher) Dell’Oro suggest that the three other major U.S. hyperscalers (Facebook (FB), Google and Microsoft) spend between 60% and 80% of total capex on (cloud computing) data centers and related infrastructure equipment, much higher than Amazon given its growing logistics and fulfillment spend,” Huberty said. “Quarterly capex trends for Amazon have become a less effective indicator of data center spend compared to the other three U.S. hyperscalers.”

    Amazon: Cloud Revenue Grows 30% In 2020
    But for all of 2020, Amazon’s capital spending boomed 138% to more than $40.1 billion, said a Bank of America report. Google’s overall capital spending dipped 5% to $22.3 billion while Microsoft’s total capital spending rose 30% to $17.6 billion, said BofA.

    The three biggest cloud computing services continue to gain share vs. rivals such as IBM (IBM) and Oracle (ORCL), analysts say. But whether they’re making significant profit — or any profit at all — based on what they spend is unclear.

    AWS cloud revenue rose 30% to $45.4 billion in 2020. Microsoft’s Azure cloud business climbed 50% to $24.7 billion. Google’s cloud revenue, including Workspace office software, rose 46% to $13.1 billion. To stay on top, the cloud titans aim to make sure they can meet growing customer demand.

    Their customers rent computer processing power and data storage by the hour, week or month.

    Another Set Of Cloud Titans:

    Bank of America has its own group of cloud computing titans that includes China’s Alibaba Group (BABA), Baidu (BIDU) and Tencent Holdings (TCEHY) as well as Microsoft, Google, Facebook and Amazon stock.

    It forecasts that 2021 cloud capital spending by those seven companies will rise 20% to $128.3 billion vs. 37% growth in 2020.

    Dell’Oro, in a March 17 press release, forecast that “hyperscale,” cloud data center capital spending will rise 20% in 2021. However, Dell ‘Oro didn’t provide a dollar figure or list the companies involved in the forecast. Dell’Oro did not respond to an email requesting more information.

  2. Statista has AWS way ahead of AZURE:

    In the first quarter of 2021, the most popular vendor in the market, Amazon Web Services (AWS), has maintained a steady lead in terms of market share, controlling 32 percent of the entire cloud infrastructure services market. Microsoft Azure takes the second place with 19 percent market share, followed by Google Cloud with 7 percent market share.

  3. July 30, 2021 UPDATE:
    Global spending on cloud infrastructure services totaled USD 42-47 billion in the second quarter of 2021, according to two of the latest research reports from Canalys and Synergy. That’s a rise of 36-39% from the same period a year earlier.

    The industry attracted spending of 47 billion in the period, up 36 percent from a year earlier and USD 5 billion higher than the previous quarter, thanks to workload migration and the acceleration of cloud native application development, a study by Canalys showed.

    The pandemic and, more recently, extreme weather events have raised concerns over the long-term disruption from environmental risks, boosting the importance of cloud services, the researchers found.

    The top three cloud service providers attracted 61 percent of total spending in the second quarter, led by Amazon Web Services (AWS) whose income rose 37 percent year on year and had a 31 percent market share, Canalys researchers estimated.

    Microsoft Azure was the second largest cloud service provider, with a 22 percent market share, and its income grew 51 percent year on year while Google was third with an 8 percent market share and with a 66 percent annual rise in income over the quarter.

    According to data from Synergy Research Group, meanwhile, second-quarter enterprise spending on cloud infrastructure services totaled USD 42 billion, up USD 2.7 billion quarter on quarter and 39 percent higher than the year-earlier period, marking the fourth successive quarter of year-on-year growth.

    According to Synergy Research’s calculations, Amazon re-established its strong lead in the second quarter with a 33 percent share of the cloud market, thanks to sequential growth of 10 percent. Microsoft and Google accounted for another 30 percent of the market. Synergy added, and the next 20 cloud providers combined had a 28 percent market share.

    Among the companies chasing the top three, those with above average growth rates include Alibaba and four other leading Chinese cloud providers, Synergy said.–1392136

  4. Amazon Web Services beat expectations (by $651 million) with revenues of $16.11 billion. Its operating income, $4.88 billion, was up almost 40% from a year ago.

    Put differently, Amazon’s cloud unit, leading the cloudy sector with a 41% market share, had more operating income than the company as a whole. It makes up 15% of the company’s total revenue, with its operating margin widening to 30.3% from 28.3% in the previous quarter.

    “A lot of customers accelerated their journey to the cloud based on the pandemic,” said Amazon’s chief financial officer, Brian Olsavsky, on a conference call.

  5. “AWS Cloud WAN removes the difficulty of stitching together and managing third-party tools so customers can now more easily keep their networks securely connected and high performing,” David Brown, VP of AWS Elastic Compute Cloud, said in a statement.

    Cloud WAN works like most middle-mile network providers. In the case of branch-to-branch communications, customer traffic travels a short distance across the internet to the nearest AWS data center where it hops aboard the cloud provider’s private network.

    Once on the network, customers can define how that traffic should be routed between AWS data centers based on networking and security policy configured in the Cloud WAN dashboard. The traffic then leaves AWS’ network at the data center closest to its destination — or as dictated otherwise by routing policy — and completes its final leg once again over the internet.

    While Cloud WAN supports a variety of popular SD-WAN vendors at launch, it should be noted that SD-WAN is not a prerequisite. The service also supports AWS VPN, Direct Connect, and Transit Connect Gateway as on ramps.

    However, according to Cisco’s Raj Gulani, senior director of product management for enterprise cloud and SD-WAN, using AWS Cloud WAN in conjunction with SD-WAN provides numerous benefits.

    By integrating with Cloud WAN, SD-WAN customers can extend their existing WANs into and across AWS’ private network, enabling consistent networking and security policy enforcement, he said. “We can actually orchestrate the entire internal network backbone with just a push of a script from our side and that gets honored by AWS.”

    This is possible thanks to deep API integrations with Cloud WAN that enable SD-WAN vendors, like Cisco, to orchestrate the middle-mile network based on the customer’s intent, he explained. “Now we can actually honor the enterprise SD-WAN policy from an intent perspective.”

    By extending the SD-WAN overlay across AWS Cloud WAN customers can also maintain visibility and more importantly, extend network segmentation across the middle mile, noted Karl Brown, senior director of product marketing for VMware’s SASE business unit, in an interview with SDxCentral. “If they [the customer] had segmented guest traffic from employee traffic, if they had segmented different internal teams … we can maintain that segmentation across the AWS Cloud WAN.”

    Cloud WAN Competition Amps Up
    AWS is far from the first cloud provider to venture down this path. Earlier this year, Google announced the evolution of its SD-WAN Cloud Hub platform — which bears striking similarities to Transit Connect Gateway and Direct Connect — to support middle-mile transport.

    Google Cloud’s Network Connectivity Center, similar to AWS Cloud WAN, provides a single dashboard for provisioning and managing VPN tunnels and SD-WAN interconnects. Cisco was among the first to announce support for the service and was joined by rival SD-WAN vendors Fortinet and Versa late this spring.

    Meanwhile, Microsoft introduced this functionality more than a year earlier in an update to the Azure Virtual WAN Hub. In addition to providing an on-ramp to workloads running in Azure, vWAN provides a platform on which technology partners could extend their SD-WAN overlays across the public cloud provider’s network.

    While not public cloud providers, content delivery network (CDN) and domain name system (DNS) providers Cloudflare also offers similar transport services targeted at SD-WAN customers.

    Building on these developments, many SD-WAN vendors see an opportunity to glue the various clouds together, enabling branches, users, and workloads to communicate seamlessly regardless of where they’re located or on which cloud they’re running.

    “What VMware, as a company, will provide is a means to go across cloud and provide security and connectivity as you shift data and workloads across the different cloud providers,” Karl Brown said.

    VMware isn’t alone in this endeavor. Cisco and Fortinet have announced similar plans to address multi-cloud networking challenges using their SD-WAN and security platforms.

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