News

Report: Microsoft's Broad Ecosystem Makes It 'The Leading Cloud Player'

• By Gladys Rama
• October 12, 2021

Microsoft has historically played second fiddle to Amazon Web Services (AWS) when it comes to market share. Most estimates put AWS' share of the total cloud infrastructure market at roughly 33 percent, with Microsoft Azure a distant No. 2 at about 20 percent.

However, Microsoft's broader portfolio of cloud offerings have made it "the leading cloud player, based on revenues from the whole ecosystem," according to new data from Synergy Research.

The market research group on Tuesday released findings showing a 25 percent year-over-year growth in overall cloud revenues in the first half of 2021, reaching $235 billion.

The biggest gains came from vendors providing cloud infrastructure services -- the category dominated by AWS, Microsoft and, to a lesser but growing degree, Google. Revenue from products in this category, which spans Infrastructure as a Services (IaaS), Platform as a Service (PaaS) and hosted private clouds, grew by 37 percent, topping $150 billion in the first six months of the year.

Synergy also saw double-digit year-over-year growth in other cloud segments:

• Enterprise Software as a Service: 24 percent
• Datacenter IT Hardware and Software: 16 percent
• Public Cloud Datacenter Colocation and Construction: 17 percent

According to Synergy, just 15 vendors generated "well over half" of all cloud-related revenues:

Across the whole cloud ecosystem, companies that featured the most prominently were Microsoft, Amazon, Salesforce, Dell, Google and IBM. Other major players included Cisco, Adobe, Oracle, VMware, SAP, HPE, Alibaba, Inspur and Huawei.

"The companies doing particularly well are those which don't have boat anchors of large, legacy non-cloud markets," said Synergy chief analyst John Dinsdale in a prepared statement, pointing to Amazon, Salesforce and Google as examples. "Ten years ago, [these companies] were hardly present in enterprise IT, but are now a major force in the market."

Microsoft is unique in this regard, however. "[Microsoft] has had a large enterprise presence for many years but has transformed itself into being the leading cloud player, based on revenues from the whole ecosystem," Dinsdale said.

Case in point: Of the four cloud categories whose growth Synergy clocked in its report, Microsoft is a major player in three -- infrastructure services, enterprise SaaS, and datacenter IT hardware and software.

"Cloud-associated markets are growing at rates ranging from 15% to over 40% per year and our forecasts show that annual spending on cloud services will double in under four years," Dinsdale said. "Cloud is increasingly dominating the IT landscape, benefitting companies throughout the cloud ecosystem."