Can anybody catch Amazon?

By Christine Burns, Network World |  Cloud Computing

It is quite a stretch for most cloud service providers to match the geographical reach of Amazon Web Services. It's equally tough to roll out a portfolio of public cloud offerings at the same pace as Amazon.

It's also quite hard to build the industry ecosystem of independent software vendors and certified professionals that Amazon has managed to nurture and grow. 

And it is virtually impossible to beat Amazon on price.

But that hasn't stopped dozens of companies from jockeying for position in the public cloud marketplace as the next best thing to AWS. There is still a significant market opportunity due to the fact that public cloud services are being used more frequently, both as an extension of enterprise IT as well as a base infrastructure for startups. The question many enterprise IT executives are pondering pertains to which ones are going to be around in three to five years.

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Amazon is the undisputed leader in the global IaaS market, according to London-based market research firm TechNavio. Analysts there define the market as including both compute- and storage-as-a-service offerings.  Amazon's market share this year sits at between 41 and 43 percent, according to a report published by the company last month. Looking at just EC2, Amazon's public compute option, the company held a market share of around 60 percent. Sitting at a very distant second was Rackspace at 13 to 15 percent. TechNavio analysts say they expect that Amazon will hold onto that lead for the foreseeable future.

While industry analysts point out that competitors like Google, Joyent, Microsoft, Rackspace,  Savvis and Terremark are likely to gain some market share, they are not likely to cut too deeply into the revenue stream Amazon currently pulls in with AWS, as cloud spending is expected to grow rapidly.

IDC predicts that U.S. public IT cloud services revenue will experience a compound annual growth rate of 18.5% over the forecast period outlined in its most recent report, from $18.5 billion last year to $43.2 billion in 2016. The IDC report, published in late 2012, includes assessments in five functional market segments within its definition of public cloud services including application as a service, system infrastructure software as a service (which includes Infrastructure as a Service [IaaS]), platform as a service (PaaS), server as a service and basic storage as a service. IDC predicts that by 2016 the global market for these services will surpass $100 billion.


Originally published on Network World |  Click here to read the original story.
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