Cloud service providers’ battle drives the worldwide cloud infrastructure market up 42% in Q1 2017

          

Palo Alto, Shanghai, Singapore and Reading (UK) – Monday, 15 May 2017


The worldwide cloud infrastructure services market continued growing in Q1 2017, up 42% year on year to reach US$11.4 billion, according to Canalys’ latest estimates. Amazon’s AWS maintained its dominance, holding a stable global market share of 31%. It was followed by its strongest hyper-scale rivals - Microsoft, Google and IBM. Microsoft grew 93% and Google was up 74% compared to the same quarter a year ago. These growth rates were faster than those of AWS and IBM, which grew 43% and 38% respectively.

“Competition for enterprise customers is intensifying among leading cloud service providers, which are investing heavily to secure key national and global accounts,” said Canalys Research Analyst Daniel Liu.  “Timing is crucial, as many large accounts are assessing, formulating and executing strategies to move existing workloads and infrastructure to the cloud, and develop new types of workloads as part of digital transformation initiatives.”

Cloud players are therefore looking to the channel to expand their reach, especially into mid-market opportunities. “The channel has become integral to winning in the enterprise, with top cloud players focusing on channel expansion plans,” said Canalys Senior Analyst Jordan De Leon. 

AWS has an established channel program that is growing and is cited by the company as helping to win key global clients. Microsoft’s growth in Q1 2017 demonstrates the benefit of having a huge enterprise client base and converting it to Azure.  Many of the leading enterprise vendors are building on Azure Stack, Microsoft’s latest cloud initiative, to provide customers with hybrid solutions.  

Third-placed Google has revamped its partner program as it strives to catch up. “It has made progress toward meeting the technology and feature requirements of large enterprise customers.  But to rival the others, it needs to demonstrate its enterprise readiness and enhance its credibility. To achieve this, it needs to sustain investment in both technology and go-to-market, and continue to highlight key customer wins,” De Leon commented.

“Go-to-market strategy, including both customer and channel partner engagement, will ultimately determine vendor success in this segment.” He added “Larger enterprises will adopt a multi-cloud strategy to distribute risk. Ultimately, to challenge AWS, vendors will need deep financial resources to continue to participate and advance.”

For more information, please contact:

Canalys EMEA: +44 118 984 0520
Matthew Ball: matthew_ball@canalys.com +44 118 984 0535
Claudio Stahnke: claudio_stahnke@canalys.com +44 118 984 0546

Canalys APAC (Shanghai): +86 21 2225 2888
Daniel Liu: daniel_liu@canalys.com +86 21 2225 2817

Canalys APAC (Singapore): +65 6671 9399
Jordan Mari De Leon: jordan_mari_deleon@canalys.com +65 66 719 397

Canalys Americas: +1 650 681 4488
Alex Smith: alex_smith@canalys.com +1 650 681 4486

About Canalys

Canalys is an independent analyst company that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. We stake our reputation on the quality of our data, our innovative use of technology and our high level of customer service.

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