As more businesses move their applications onto cloud platforms, the “Infrastructure as a Service” cloud hosting market has grown at an exceptional rate. This explosive growth has drawn more large competitors into the market, ultimately driving down the cost of spinning up a new cloud server.
AWS versus the rest of the market
Cloud hosting companies are in a ‘land grab’ situation, with each one driving prices down and offering attractive new features, many for free, in order to gain market share. Financial analysts regularly analyze the financial statements of the Big 4 cloud hosting companies—AWS, Google, Microsoft and IBM. Dissecting each organization’s financial statements, analysts are able to quantify how much “cloud” growth each showed per quarter.
Since they entering the market 10 years ago, AWS has maintained its position as market leader. In time’s past, Amazon owned 40 percent of the market while Google, Microsoft and IBM captured less than 20 percent share collectively (the rest going to many smaller companies). That leading share has begun to erode as competitors have cut into AWS’s market share using pricing as their main weapon. Today, AWS still dominates the cloud hosting market with over 35% market share, and continues to grow by more than 40 percent in annual revenues. The others of the Big 4 have picked up 2-3 percent market share each, while nearly doubling their own IaaS business.
With such heated price competition, it’s a great time for startups and other companies to take advantage of cloud hosting features and capabilities. Basic cloud hosting services, including servers and storage, have been heavily commoditized. Every major competitor of today offers similar services with different names and descriptions. Servers are measured in numbers of CPUs or cores. RAM and storage can easily be compared using total GigiBytes.
Comparing the offerings of the Big 4
AWS offers a larger array of server ‘products’ that make it easier to build and manage cloud solutions. Features such as autoscaling, push services, backup solutions, IoT and CDN services are offered at aggressive price levels, with the intention of making their hosting services ‘stickier’.
Google’s Firebase backend offering has had great success. The platform is now used by many mobile apps as a turnkey backend solution. Firebase is favored for its realtime database, robust analytics, notifications delivery system and suite of other platform features.
Microsoft Azure caters to enterprise customers, with over 100 add-on services and 62 compliance certifications. With e-commerce, blockchain, business intelligence and other app solution offerings, startups and companies operating across all sectors stand to benefit from Microsoft Azure.
As if these four tech behemoths weren’t enough, other larger industry players have begun to enter the market, seeing the huge potential of this $40 Billion market. Chinese internet giant Alibaba recently entered into the fray vowing to capture sizable market share, while conceding that they will not make any money from this line of business for the foreseeable future.
App developers are the clear winners
Startups and enterprises moving their infrastructure into the cloud are the clear winners of today’s market. Similar as when buying a new mattress, cost savings can be realized so long as you shop around. SemperCon has extensive experience developing applications with every leading cloud provider on the market. Using our expertise, we’re able to recommend the best platform and most favorable deals to our our clients.