The worldwide infrastructure as a service (IaaS) public cloud market grew 31% in 2016 to total $22.1bn, up from the $16.8bn generated in 2015, according to analyst house Gartner. Amazon was the number one vendor in the IaaS market last year, followed by Microsoft and Alibaba.
The move to public clouds was illustrated earlier this month when it was reported that spending on non-cloud data centre infrastructure had plummeted by almost a fifth in 24 months, according to analyst Synergy Research Group, signalling the opportunities for managed service providers delivering their services through public clouds.
Synergy said spending on infrastructure in public clouds had grown by 35% in the same period, illustrating the continuing activity of hyper-scale public cloud providers.
"The market for cloud services is growing faster than virtually every other IT market today, with much of this growth coming at the expense of the traditional, non-cloud offerings," said Gartner analyst Sid Nag.
While platform as a service (PaaS) and software as a service (SaaS) are also exhibiting "strong growth", IaaS is expected to show the fastest growth over the next five years, Nag said.
Although Amazon Web Services dominated the market in 2016, Microsoft Azure gained more momentum, said Gartner, and Google made some gains. As competitive pressures increase, says Gartner, Amazon will witness growth erosion in share, while non-hyperscale providers also struggle to provide value through their services. But other IaaS market leaders will see an increase in growth, it said.
Currently, Amazon is the clear leader in the IaaS market with 44.2% of the market, followed by Microsoft with a still modest 7.1% and Alibaba holding 3%. Google only has 2.3%, just ahead of Rackspace with 2.3%. Other players make up another 41.2% of the IaaS market, illustrating there is still a lot to play for as far as the leading bunch are concerned.
While dominant in China, Alibaba announced the launch of four new data centres located in Europe, Australia, the Middle East and Japan in 2016.