Cloud infrastructure revenue hits almost $70 billion in 2018

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Based on Q4 earnings data, Synergy Research Group estimates that quarterly cloud infrastructure revenue totalled close to $20 billion, resulting in almost $70 billion for the year.

Spending cloud infrastructure increased by 45% from the fourth quarter of 2017, resulting in a full-year growth of 48% in 2018. The new figures indicate that the growth rates throughout 2018 were higher than that of 2017.

“Q4 tops off a banner year for the cloud market with the annual growth rate actually nudging up from the previous year, which is an unusual phenomenon for a high-growth market of this scale,” said John Dinsdale, a chief analyst at Synergy Research Group. “The rate at which the market leaders continue to expand is really rather impressive. “

In terms of market positioning, Amazon was the clear market leader nudging its market share upwards and is the equivalent of its next four competitors combined in terms of size. Revenue growth at Microsoft, Google and Alibaba was overall ahead of the market growth rate, with all three gaining substantial market share, Microsoft in particular jumped ahead.

“In aggregate the top five drove up their revenues in these segments by 60% in 2018, which has caused us to review and increase our five-year forecast for the market, added Dinsdale. “Inevitably there will be a few road bumps along the way but these will be minor relative to the factors that continue to drive the market.”

The increase in market share experienced by the four was to the detriment of small-to-medium sized cloud operators, who collectively lost five percentage points of market share over the last four quarters. IBM remains the strong leader in the hosted private cloud segment of the market.

In addition, public infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS) make up the bulk of the market and grew by 49% in Q4 of 2018.