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AWS, Microsoft And Google Lead For IaaS and PaaS Revenue: Report

“Amazon and Microsoft have led the charge in terms of driving changes and aggressively growing cloud revenue streams, but many other tech companies are also benefitting, ” says John Dinsdale, chief analyst and research director at Synergy Research Group.

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Cloud Infrastructure Spending

Total spending on hardware and software for cloud infrastructure reached almost $55 billion -- climbing a little more than 10 percent -- and was just about equally split between public and private clouds, according to Synergy.

Dell EMC, Cisco Systems and Hewlett Packard Enterprise (HPE) led on the public cloud side, while Dell EMC, Cisco and HPE topped the private and hybrid cloud side.

“As with any capital-intensive industry, companies have to invest in infrastructure before they can start generating revenues from selling services that run off that infrastructure,” Dinsdale said. “Typically, over time, as markets develop and mature, the percent of revenue that has to be invested back into the infrastructure declines, and profit margins and cash flows ought to improve. In this case it is a bit more complex than that, as some of the infrastructure investment is going into private clouds as well as public clouds.”

Beyond cloud services, the cloud infrastructure being put in place by the hyperscale operators also is supporting services such as search, social networking, email, e-commerce, gaming and mobile apps.

Cloud provider spending on data center leasing and colocation services had continued strong growth, climbing 17 percent compared to the first six months of 2018, with real estate investment trusts Digital Realty, Equinix and CyrusOne as the first-half segment leaders.

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