Amazon, Google and Microsoft are still bagging the lion’s share of growth in the cloud marketplace, but fresh Q3 2021 data from Synergy Research Group showed business is also booming for medium and small cloud providers.
In its new report, Synergy estimated cloud infrastructure service revenue in the quarter totaled $45.4 billion, up 37% from approximately $33 billion in Q3 2020. John Dinsdale, a chief analyst at Synergy, noted in a statement $17 billion of that total came from cloud providers other than Amazon, Google and Microsoft. And that figure was up 27% year on year, he noted.
“By any standards a $17 billion market growing at such a rate is an attractive proposition for many service providers and their suppliers,” Dinsdale said. “Clearly there are challenges with the big three companies lurking in the background, so the name of the game is not competing with them head on. Providing companies are smart about targeting the right applications and customer groups, cloud can provide a broad and exciting range of growth opportunities for them.”
He added in comments to Fierce "The sweet spots for smaller cloud providers tend to be with local SMBs that need a good level of local support and national organizations that don’t need multi-country coverage. Organizations and use cases that have strict privacy and data sovereignty requirements are also good targets."
Still, Amazon’s market share remained unchanged year on year at 33%, while Microsoft stepped up from 18% in Q3 2020 to 20% in the most recent quarter. Google trailed with 10% market share (compared to approximately 9% last year) while Alibaba and IBM rounded out the top five with 6% and 4% market share, respectively.
Salesforce had a 3% market share, with Tencent and Oracle holding 2% apiece. Other players with a market share of 1% or less include Baidu, China Telecom, China Unicom, Huawei, Fujitsu, NTT, Rackspace and SAP, Synergy’s data showed. Outside of market share gains by the big three, Dinsdale told Fierce "the main companies who have managed to nudge their worldwide market shares upwards are the Chinese cloud providers, which is based almost entirely on progress in their home market."
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In the recent quarter, revenue from Amazon’s cloud business jumped 39% to $16.11 billion, with its operating profit rising 38% to $3.5 billion. Meanwhile, revenue from Microsoft’s cloud division rose 36% to $20.7 billion, with Azure sales up 31% to $17 billion. Alphabet’s Google Cloud unit posted the strongest growth at 45%, bringing its revenue for the quarter to nearly $5 billion.
This story has been updated with additional comments from Synergy's John Dinsdale.