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Why Amazon Continues to Lead Cloud Space

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Oct. 6 2016, Published 6:27 p.m. ET

Cloud space growth across major milestone in 2Q16

With the way the SMAC (social, mobile, analytics, and cloud) revolution is changing today’s IT (information technology) scenario in favor of the cloud, the cloud is bound to be the most talked about phenomenon in the IT space. Most of the leading players in the cloud space have already released their 2Q16 earnings.

Based on these earnings, Synergy Research estimates that quarterly cloud infrastructure service revenues in 2Q16 have surpassed the $8 billion landmark, with TTM (trailing-12-month) cloud revenues close to $28 billion. Cloud infrastructure service revenues are comprised of IaaS (infrastructure-as-a-service), PaaS (platform-as-a-service), and private and hybrid cloud.

Cloud as a whole grew 51%, with the top four players—Amazon.com (AMZN), Microsoft (MSFT), IBM (IBM), and Google (GOOG) (GOOGL)—collectively reporting 68% growth. The next 20 cloud players, including Oracle (ORCL) and Salesforce (CRM), grew 41%.

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Amazon rules the cloud space

As the above chart shows, Amazon continues to rule the cloud space with more than 30% market share. Amazon is followed by Microsoft, IBM, and Google, which collectively held a little more than 20% market share of the cloud space. Among the top four players, Google reported the highest growth rate of 152%.

When it comes to size, Amazon is almost 3x the size of its closest competitor, Microsoft, and is an undisputed leader in the majority of regions as well as across segments of the cloud space. As the above chart shows, Microsoft and Google, with their triple-digit growth rates, point toward significantly higher growth in cloud space, while IBM, due to its leadership in the hosted private cloud segment, managed to feature in the top five cloud players.

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