Cloud infra services up 52% year on year to $9.5b

Worldwide cloud infrastructure services expenditure grew 52.3% year on year in Q2 2016, reflecting the ongoing adoption by businesses and expanding use of consumer-centric services, such as social media, gaming and video streaming.

Amazon’s AWS remained the leading cloud infrastructure services provider, accounting for 30.4% of total spend, according to a new report from Canalys Research.

Its early mover advantage, aggressive pricing, broad geographic coverage and wide range of service offerings are key factors behind its success. But it is under growing pressure from Microsoft Azure, Google Cloud Platform and IBM SoftLayer.

Overall, these four providers represented 60.5% of total worldwide cloud infrastructure services spend.

Daniel Lu, analyst at Canalys Research said, “The need for scalable and on-demand infrastructure is being driven by application testing, development and hosting; content delivery, big data and analytics; machine learning, IoT, disaster recovery and back-up; plus storage.”

“But not every organization and every workload will migrate to the cloud. Cost is a major issue, but also compliance and regulations, security concerns, and application readiness are determining factors in cloud migration strategies. The adoption of hybrid cloud and on-premises solutions is prevalent as organizations seek to get the best of both worlds,” Lu noted.

The total value of the cloud infrastructure services market was $9.5 billion in the second quarter of 2016.

North America remained the largest market, representing 55.3% of the worldwide total, followed by EMEA at 24.7%, Asia Pacific at 15.9% and Latin America at 4.0%. For full-year 2016, Canalys predicts that the worldwide market will grow 50.3% to reach $37.8 billion.