According to the latest Q2 data released by Synergy Research Group, Amazon, Microsoft, and Google are clearly the leaders in the global cloud market in terms of quarterly revenue. Their market shares are 32%, 23%, and 12% respectively, while the market shares of other companies have not exceeded 4%. After these three companies, the top six are Alibaba, Oracle, and Salesforce. Leaving aside China, the rankings of the top three cloud providers in all major regions – the United States, other parts of the Asia Pacific region, Europe, and other parts of the world – are the same. Outside of the top three, the rankings of each region do vary slightly, with Oracle, Salesforce, IBM, and NTT typically competing for positions. However, the commonality of the top three rankings indicates that the cloud market is truly global. To become a market leader, it requires a large scale, strong funding, continuous technological innovation, a global brand, a global network of ultra large infrastructure, as well as long-term corporate commitment and focus. For anyone who wants to challenge cloud computing leaders, this is the main obstacle.
In specific countries or regions, local businesses can compete by leveraging local expertise, reputation, regulatory or data residency requirements, but this often limits the opportunities for local businesses to target niche markets. China is different. Due to geopolitical and historical factors, competition among Western cloud providers in the Chinese market is severely limited, and the Chinese market is large enough to support multiple local companies. The market is currently dominated by Alibaba, Tencent, China Telecom, and Huawei. The top ten companies are all Chinese companies.
Synergy data shows that cloud infrastructure service revenue (including IaaS, PaaS, and hosted private cloud services) was $79 billion in the second quarter, with revenue reaching $297 billion in the past 12 months. Public IaaS and PaaS services continue to dominate the majority of the market. Geographically speaking, the United States remains the largest cloud computing market to date, closely followed by China, which itself is far ahead of other countries led by Japan, the United Kingdom, Germany, and India. Divided by region, the United States is actually much larger than the entire Asia Pacific region. The United States, China, Asia Pacific region, and Europe together account for over 90% of the global market.
Synergy Research Group Chief Analyst John Dinsdale said, “This is just a game of scale. Amazon, Microsoft, and Google now have a global network of over 560 operating hyperscale data centers. In the second quarter alone, they invested over $48 billion in capital expenditures, most of which were used to build, equip, and update their data centers and related networks. However, local companies still have many competitive opportunities in the domestic market. This is a rapidly growing market with a long list of small and medium-sized enterprises in all regions or major countries. The key is to carefully focus on specific services, industry verticals, or customers, where they can demonstrate sustained competitive advantages over industry giants. That’s right.”