Amazon, Microsoft, Alibaba, Google and IBM are still the undisputed heavyweights of the public cloud infrastructure-as-a-service (IaaS) market, according to the latest figures from Gartner.

The total market, which swelled with 31.3% growth in 2018 to a total of $32.4 billion, is displaying strong signs of consolidation as the dominant players swoop in.

Amazon took out almost half (47.8%) market share in 2018 with $15.5 billion, followed by Microsoft (15.5%), Alibaba (7.7%), Google (4.0%), and IBM (1.8%).

In 2018, the top five IaaS providers accounted for nearly 77% of the global IaaS market, up from less than 73% in 2017.

"Despite strong growth across the board, the cloud market's consolidation favours the large and dominant providers, with smaller and niche providers losing share,” comments Gartner research vice president Sid Nag.

“This is an indication that scalability matters when it comes to the public cloud IaaS business. Only those providers who invest capital expenditure in building out data centers at scale across multiple regions will succeed and continue to capture market share. Offering rich feature functionality across the cloud technology stack will be the ticket to success, as well.

Gartner predicts that market consolidation will continue through 2019, driven by the high rate of growth for the top providers, which experienced aggregate growth of 39% from 2017 to 2018 compared with the more modest growth of 11% for all other providers during the same period.

“Consolidation will occur as organisations and developers look for standardised, broadly supported platforms for developing and hosting cloud applications,” says Nag.

Breakdown of the top four public cloud IaaS providers:

Amazon is the largest of the IaaS providers, Amazon accounts for nearly half of the total IaaS market. It continues to aggressively expand into new IT markets via new services, as well as acquisitions, growing its core cloud business.

Microsoft secured the No. 2 position in the IaaS market with revenue surpassing $5 billion in 2018, up from $3.1 billion in 2017. Microsoft delivers its IaaS capabilities through its innovative and open Microsoft Azure offering, which continues to solidify its position as a leading IaaS provider.
 
Alibaba Cloud is the dominant IaaS provider in China. It experienced the strongest growth among the leading vendors, growing 92.6% in 2018. The company built an ecosystem consisting of managed service providers (MSPs) and independent software vendors (ISVs).

Gartner notes that Alibaba Cloud's success in 2018 was driven by aggressive R-D investment in its portfolio of offerings, especially compared with its hyperscale provider counterparts. Alibaba has the financial capability to continue this trend and invest in global expansion.
 
Google grew 60.2% in revenue from 2017. “Google's cloud offering is something to keep an eye on with its new leadership focus on customers and shift toward becoming a more enterprise-geared offering,” comments Nag.

“As the cloud business continues to gather momentum and hyperscale cloud providers consolidate the market, product managers at cloud MSPs must look at other ways to differentiate, such as focusing on vertical industries and getting certified in the hyperscale cloud provider partner programs in order to drive revenue,” Nag concludes.