How has the cloud market grown in the last year?

3 Jun 20211.9k Views

Image: © Sergiy Timashov/Stock.adobe.com

There’s no denying that migration to the cloud has accelerated over the last year. But how much exactly has the market grown?

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Throughout Cloud Week on Siliconrepublic.com, we’ve examined various tips and challenges for businesses when it comes to migrating to the cloud.

Digital transformation, and cloud in particular, has been accelerating for years but 2020 brought a sudden mass move to decentralised systems and remote working.

Countless leaders have told us that things won’t go back to the way they were before – and that goes for both the way we work and the way businesses and systems are run.

It seems that the rapid shift in 2020, which is still ongoing, has finally given cloud a chance to truly shine. But what does that actually look like from a cloud market spend point of view?

Data from Synergy Research Group suggests that enterprise spending on cloud infrastructure services ramped up aggressively in 2020, growing by 35pc compared to the previous year and reaching almost $130bn. Meanwhile, enterprise spending on data centre hardware and software dropped by 6pc.

A bar chart showing the growth of cloud market spending over the past 10 years.

Infographic: Synergy Research Group

John Dinsdale, a chief analyst at Synergy Research Group, said he has seen “a dramatic increase in computer capabilities, increasingly sophisticated enterprise applications and an explosion in the amount of data being generated and processed”.

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This, he added, has led to the growing need for data centre capacity. “However, 60pc of the servers now being sold are going into cloud providers’ data centres and not those of enterprises.

“Clearly companies have been voting with their wallets on what makes the most sense for them. We do not expect to see such a drastic reduction in spending on enterprise data centres over the next five years, but for sure we will continue to see aggressive cloud growth over that period.”

Other data from Synergy Research Group this year suggests an interesting development in the cloud provider market.

While Amazon Web Services has kept between 32pc and 34pc of the overall cloud market share over the last four years, Microsoft, Google and Alibaba have all steadily gained market share.

A line graph showing several different cloud providers and their share in the market.

Infographic: Synergy Research Group

Microsoft in particular has made significant gains, and 2020 saw the tech giant hit the milestone of a 20pc worldwide market share.

“Amazon and Microsoft tend to overshadow the market, with Amazon’s share staying at well over 30pc and Microsoft growing its share from 10pc to 20pc over 16 quarters,” said Dinsdale.

“However, after excluding those two, the rest of the market is still growing by over 30pc per year, pointing to growth opportunities for many of the smaller cloud providers.”

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Jenny Darmody is the deputy editor of Silicon Republic

editorial@siliconrepublic.com