Amazon Web Services is bigger than its next 4 competitors combined as cloud became a $70 billion market last year (AMZN, GOOG, MSFT)

jeff bezos

Companies spent $70 billion on cloud computing infrastructure services in 2018 with Amazon gobbling up the lion's share.
Amazon remains as big as its next four competitors combined, although Microsoft is growing faster, market research firm Synergy Research Group finds.

The cloud computing market went bonkers in 2018, with businesses spending $70 billion on cloud services, says John Dinsdale, chief analyst at Synergy Research Group.

Cloud computing is where companies rent the tech they need, served up to them over a network connection, and pay only for what they use. This is opposed to the traditional method of buying hardware and software, installing it and maintaining it themselves.

There are a lot of services called "cloud" these days but Synergy's most recent market share report focused on two types: infrastructure-as-a-service and platform-as-a-service. IaaS is when companies rent things like computer servers and storage.

PaaS is where they write apps that live in the cloud, renting everything necessary to support their apps. There's another type of cloud called software-as-a-service, where companies rent the apps themselves, accessed over the internet. This includes things like Microsoft Office 365 or Salesforce. All of those are known collectively as "public" cloud.

This report did not include the SaaS market. However, in a head-bow to the traditional tech companies like IBM, Synergy did include what's called "private" cloud. That's jargon that refers to selling hardware and software for use in a company's private data center. Even though this is a traditional market, its called private "cloud" because this tech must work well with public cloud services, allowing companies to use both.

Only one big cloud provider actually reports cloud revenues — Amazon. The others lump their cloud revenue in with other products and services, making it a bit of a guessing game to determine market share by publicly released numbers alone.

However, Synergy has been tracking cloud computing for years and by its calculations:

Amazon owns 35% of the market
Microsoft: 15%
Google: 7%
IBM: 7%
Alibaba: 5%

That means that Amazon's cloud is bigger than its next four competitors, combined.

Dinsdale says that Amazon has even managed to grow its share of the cloud as the market boomed.

That said, Microsoft Azure wins the prize for fastest growth. While Amazon still looks unbeatable, Microsoft is a serious challenger. And if Microsoft comes from behind to win a coveted $10 billion deal from the Department of Defense, as some sources are now saying may happen, 2019 could be the year that Amazon's dominion starts to fade. That, however, is a big if.

Synergy cloud market Q418