- Amazon, Microsoft Azure, Google, Alibaba clouds pull 33% growth in Q3’2020
Due to the global pandemic and the shift to remote work, the migration to cloud computing has accelerated in 2020.
According to the research data analysed and published by StockApps, the global public cloud services market is projected to grow by 6.3 per cent in 2020.
That would see the sector go up from a value of $242.7 billion in 2019 to $257.9 billion in 2020.
It is expected to keep up the robust growth, reaching $306.9 billion in 2021 and $364.1 billion in 2022.
With enterprises seeking to support remote work, Desktop as a Service (DaaS) is projected to post the highest growth.
It will grow by a massive 95.4 per cent year-on-year (YoY) to reach $1.2 billion from $616 million.
Among the reasons for its remarkable growth is the fact that DaaS is cost-effective and offers secure access to enterprise applications from multiple locations and devices.
In 2021, it is anticipated to reach $1.95 billion and in 2022, $2.5 billion.
Software as a Service (SaaS) will retain its position as the largest segment, growing to $104.7 billion in 2020 from $120.1 billion in 2019.
Comparatively, the second largest segment, Infrastructure as a Service (IaaS) will be worth $50.4 billion in 2020. It will grow by 13.4 per cent from a value of $44.5 billion in 2019.
For SaaS, subsequent years will see more significant growth as it is projected to grow to $120.99 billion in 2021 and $140.6 billion in 2022. IaaS is estimated to reach $64.3 billion in 2021 and in 2022, $80.98 billion.
Top Four Cloud Service Providers Grew a Collective 40% in Q3 2020
During Q3 2020, the global cloud market grew an incredible 33 per cent to reach $36.5 billion.
According to Canalys data, this was $9 billion higher than the Q3 2019 total and $2 billion higher than the Q2 2020 figure.
Canalys also revealed that the top four cloud infrastructure service providers collectively grew an impressive 40 per cent in Q3 2020.
These were Amazon Web Services, Microsoft Azure, Google Cloud and Alibaba Cloud.
Amazon Web Services (AWS) maintained its top position in the cloud infrastructure market with a 32 per cent share of the total spending.
Though its market share was up from 31 per cent in Q2 2020, it had dropped from 33 per cent in Q3 2019. But in comparison to Q3 2019, its cloud business grew by $2.6 billion.
Total AWS revenue for the quarter amounted to $11.60 billion, more than the combined revenue of the next three providers
That marked an increase of 29 per cent YoY. AWS operating income for the quarter was $3.54 billion, an increase of 56 per cent YoY.
It is noteworthy that about 57 per cent of Amazon’s operating income and 12 per cent of revenue for the period came from AWS.
Microsoft also grew its cloud business during the quarter, going from a 17 per cent market share in Q3 2019 to 19 per cent.
However, that was a slight drop from its 20% market share in Q2 2020. It remained the second largest player in the space.
Moreover, Microsoft Azure sales saw the highest increase compared to its competitors, growing by 48 per cent YoY. Commercial cloud revenue grew by 31 per cent YoY to reach $15.2 billion.
Its intelligent cloud segment generated $13 billion in revenue, rising by 20 per cent YoY.
On the other hand, Commercial Office products and cloud services grew by 9 per cent.
By the end of Q3 2020, Microsoft’s cloud revenue was approaching an annual revenue run rate of $61 billion.
Alibaba Cloud Accounts for 6% Market Share Globally, 40% in China
Google was the third largest cloud service provider during the period with a 7 per cent market share, up from 6 per cent in Q3 2019 as well as in Q2 2020.
Its cloud revenue shot up by 44.7 per cent YoY, from $2.379 billion to $3.4 billion in Q3 2020.
Alphabet announced during the earnings call that from Q4 2020, it would report Google Cloud as a separate segment.
That would give investors a peek into previous results from 2018 and a view into profitability.
Alibaba was the fourth largest cloud service provider globally and the leader in China as well as the larger APAC region.
It had a 6 per cent share of the global market up from 5 per cent both in Q3 2019 and Q2 2020.
Based on another study by Canalys, Alibaba Cloud had a 40.1 per cent share in the Chinese IaaS market in Q2 2020.
Huawei Cloud was second with a 15.5 per cent share while Tencent Cloud was third with 15.1 per cent.
Notably, China is the second largest cloud market globally and in Q2 2020, it accounted for 12.4 per cent of the total investment in the cloud market sector.