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Synergy Research: AWS' Cloud Lead Only Grew At The Close Of 2014

Despite Microsoft's phenomenal cloud growth last year, Amazon Web Services ended the year controlling 30 percent of the worldwide cloud market, Synergy estimated.

Amazon, the online retailer with a pretty substantial side business as the world's most dominant public cloud, actually notched up its lead in the Infrastructure-as-a-Service market in the final months of 2014, according to Synergy Research Group.

The cloud juggernaut enjoyed strong sequential growth in the fourth quarter and over that final quarter of the year -- and for the first time in five years -- Amazon Web Services controlled 30 percent of the worldwide cloud market, Synergy estimated.

More impressively, that gain was achieved with Microsoft taking long strides to close the gap, posting a whopping 96 percent year-over-year growth, according to Synergy.

[Related: New Research Shows Microsoft, IBM Notching Big Cloud Gains]

Amazon Web Services didn't grow nearly as fast in 2014 as Microsoft, or for that matter, other competitors such as Google. But size matters. When you are already bigger than your next four competitors combined, you don't need to.

AWS' 25 percent growth from the third to the fourth quarters, and 51 percent year-over-year growth, was enough to gain market share. For the entirety of 2014, AWS saw a slightly reduced 28 percent of the world's cloud business.

’The momentum that has been built up at AWS and Microsoft is particularly impressive. They have an ever-broadening portfolio of services and they are also benefiting from a slowdown in the super-aggressive price competition that was a feature of the first half of 2014,’ said John Dinsdale, research director at Synergy.

The world's third-largest cloud remained IBM, which, due to the SoftLayer acquisition, controlled 7 percent of the market in 2014. Google trailed with 5 percent, and then Salesforce.com rounded out the top five with 4 percent.

AWS, Microsoft and Google all outperformed the overall market.

IBM didn't, only growing as fast as the market as a whole -- a still-impressive 48 percent -- and thus maintaining the same overall share. But IBM has the distinction of leading in the private and hybrid service segment, Synergy noted.

Rackspace, with 3 percent market share in 2014, just missed Synergy's top five rankings.

While most of the cloud providers on the list don't break out their financials for their cloud businesses, Synergy has some sophisticated methodology for making pretty good calculated estimates.

The researcher conducts a regular quarterly survey of more than 70 leading operators in the cloud infrastructure services market, then augments those results with its own in-depth research based on earnings releases, analyst briefings, interactions with company representatives, investor data, product data and other sources.

That data is entered into an extensive market model the company refreshes each quarter.

"There is a reasonably sharp drop-off after Rackspace, but other companies featuring in the top 25 include operators like Fujitsu, NTT, HP, Deutsche Telekom, Orange, CSC, Verizon and CenturyLink," Dinsdale told CRN.

Synergy estimated that quarterly cloud revenue is now close to the $5 billion mark, with $16 billion in revenue for the whole of 2014.

’Many actual or perceived barriers to cloud adoption have now been removed and the worldwide market is on a strong growth trajectory," Dinsdale said.

PUBLISHED FEB. 3, 2015

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