Worldwide infrastructure as a service market grew 40.7% in 2020: Gartner

The worldwide infrastructure as a service (IaaS) market grew 40.7 per cent in 2020 to reach $64.3 billion, up from $45.7 billion in 2019, according to Gartner, Inc.

“Hyperscale providers are continuing to build distributed cloud and edge solutions that extend the public cloud’s reach into private and on-premise locations, addressing the needs of organisations relating to data sovereignty, workload portability and network latency,” said Sid Nag, research vice president at Gartner.

“This fact, coupled with reliance on the public cloud by a majority of organisations during the pandemic, drove another year of double digital market growth in 2020,” added Nag.

Top five players

The top five IaaS providers accounted for 80 per cent of the market in 2020 while nearly 90 per cent of all IaaS providers exhibited growth.

Amazon retained the top position in the IaaS market in 2020, followed by Microsoft, Alibaba, Google and Huawei.

Amazon led the worldwide IaaS market with $26.2 billion of revenue in 2020 and 41 per cent market share.

“Amazon’s 28.7 per cent growth was slightly slower than that of the market, with their sales growth primarily reflecting increased customer usage,” the report said.

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It was followed by Microsoft with a 19.7 per cent market share. The tech giant witnessed 60 per cent growth, reaching $12.7 billion in revenue in 2020.

“The global healthcare crisis and disruption in workplace environments during the pandemic era drove increased demand from existing Microsoft Azure customers to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail,” as per the report.

Alibaba, a dominant IaaS provider in China, grew 52.8 per cent in 2020 with revenue surpassing $6 billion, up from $4 billion in 2019. It gained a 9.5 per cent market share.

Google came in fourth with a 6.1 per cent market share. Its IaaS revenue grew 66 per cent to reach nearly $4 billion in 2020.

“Spending from the retail, government and healthcare sectors helped drive Google’s growth in IaaS in 2020, as did their focus on supporting the development and deployment of cloud applications in both a hybrid and multi-cloud model,” as per the report.

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After its second consecutive year of over 200 per cent growth in the IaaS market, Huawei broke into the top five IaaS vendors for the first time in 2020, with $2.7 billion in revenue and a 4.2 per cent market share. Over 90 per cent of this revenue was brought in by Greater China, a region that continues to see rapid cloud market growth.

“After 2019, Huawei made a hard pivot away from selling equipment to investing heavily in their cloud services business which is starting to yield results,” said Nag.

“The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over,” Nag further said.

“While the cloud market will continue to grow, the real opportunity for providers comes from growth in cloud-adjacent technology markets such as edge, 5G and AI, as CIOs look to invest in technologies that address their complex and emerging use cases,” Nag added.

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