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Amazon and Microsoft now control half of the entire cloud infrastructure market

The illusion of choice is getting weaker.
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“Duopolies” are not uncommon in America’s IT infrastructure: ISPs and mobile operators often function in this way, meaning that only two providers are available at a time in a given area.

And the problem with duopolies is that they often represent an illusion of choice that in reality stifles competition and limits consumers options, and sometimes even consumer rights.

And now, the duopoly model seems to be slowly spreading to cloud computing, too.

Although theoretically much easier to circumvent than a duopoly affecting physical, local infrastructure, the emergence of Amazon and Microsoft as two dominant public cloud computing providers should still be a cause for concern when it comes to fostering healthy competition in this rapidly growing segment of the IT industry.

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Synergy Research’s Q2 data for cloud infrastructure that shows an increase of 39 percent year-on-year, which amounted to close to $32 billion in revenue.

And although the entire market is growing, Amazon “made more money from cloud than the next four vendors combined,” the article said.

The growth trend is exceptionally strong, according to Synergy Research, who also revealed that this quarter saw the second-highest rate of growth ever, amounting to over $1.6 billion since the start of the year.

The bulk of the lucrative market is now held by Amazon’s AWS (33 percent), followed by Microsoft’s Azure (16 percent) – and together they currently account for just under half of the cloud infrastructure market. At the same time, both companies grew revenues above average, indicating a trend of their continued and rising dominance.

When it comes to the current state of the market, Google and IMB have 8 and 6 percent, respectively. Other players include Alibaba (5 percent), Salesforce (3 percent), and three more companies – among them the giant Oracle – with only 2 percent of the market each.

Even though Amazon and Microsoft are now clearly cloud infrastructure leaders, IBM has been making massive investments recently to bolster its role in the industry, believing that up to 80 percent of local workloads are yet to be migrated to the cloud – meaning that the market is still huge and up for grabs.

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