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IaaS: Today’s Big Vendors will Continue to Dominate

By Dick Weisinger

It’s likely that only the biggest of the Infrastructure as a Service (IaaS) cloud providers will be able to survive.

Sid Nag, research vice president at Gartner , said that “despite strong growth across the board, the cloud market’s consolidation favors the large and dominant providers, with smaller and niche providers losing share. This is an indication that scalability matters when it comes to the public cloud IaaS business. Only those providers who invest capital expenditure in building out data centers at scale across multiple regions will succeed and continue to capture market share. Offering rich feature functionality across the cloud technology stack will be the ticket to success, as well.”

The top five IaaS vendors make up 77 percent of the entire market and include: Amazon, Microsoft, Alibaba, Google, and IBM. With 47 percent market share, Amazon AWS is the clear leader.

Nag told InformationWeek that “it would be extremely hard for anybody to get into the market. The reason for that is you need deep pockets to invest in capex to build out your cloud data centers. That’s really the biggest expanse, the sheer volume of dollars you have to shell out to create a regional presence across different countries and geographies. Investment in R&D is important because you have to have future parity but that’s not where the discussion stops. Engineering prowess is great, but engineering prowess coupled with scalability is also important. Unless a new competitor is willing to invest to achieve the level of scale that Amazon and its nearest competitors have, it would be extremely difficult.

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