Public cloud market share numbers keep missing the point

With public cloud still just 5% of total IT spending, market share numbers may be distracting us from real customer value.

The difference between hybrid cloud, public cloud, and private cloud The biggest question in the enterprise today is often which type of cloud to run: public, private, or hybrid. However, the distinctions can be unclear, so let's define them.

Over the last few weeks Amazon, Microsoft, and Google all reported earnings, with Amazon the sole cloud vendor to disclose its revenue (tl;dr the company is on a $33 billion run rate). In response, analysts have kicked off a cottage industry of guesstimates to figure out how much revenue each of the clouds is generating and, in turn, what market share each holds. 

As fun as this cloud market share bingo may be, it's attempting to answer the wrong question. Enterprises spent $3.7 trillion on IT in 2018, with public cloud services claiming just $175.8 billion of that, according to IDC. That's right. Public cloud accounts for less than 5% of total IT spending globally. In other words, rather than fixating on market share within public cloud, a far more useful exercise would be to help enterprises break free of inefficient private data center shackles.

SEE: How to build a successful career as a cloud engineer (free PDF) (TechRepublic)

Counting the cloud

Depending on who you believe, IaaS public cloud market share breaks down as follows, based on 2018 revenue:

  • AWS - 47.8% 

  • Microsoft - 15.5%

  • Alibaba - 7.7%

  • Google - 4.0%

  • IBM - 1.8%

  • Others - 23.2%

Add in PaaS, according to IDC, and the numbers look more like this (suggesting that Microsoft has a hefty PaaS business, given that it devours a much bigger slice of the cloud market with PaaS + IaaS vs. just IaaS):

  • AWS - 33%

  • Microsoft - 17%

  • Google - 10% (approximate)

  • IBM - 7% (approximate)

  • Salesforce - 4%

  • Alibaba - 3%

AWS is the only number we know for certain; others, as some claim, might be way off. However, the relative share of this or that cloud is ultimately not that interesting, as I noted above, because the real focus should be on helping enterprises do more with public cloud, rather than reinventing the IT wheel over...and over...and over again.

This is unfortunate. 


SEE: Vendor comparison: Microsoft Azure, Amazon AWS, and Google Cloud (TechRepublic Premium)

We need more cloud

While cloud is growing faster than private data center deployments, there's a long, long way to go. Not everyone agrees. As Max Rydahl Andersen insisted to me, "It's a sad day when private is considered bad. Automation and scale is the key—when that can be done privately in your own data center centers that's better than making everyone dependent on few big mega-companies." 

SEE: Prepare for serverless computing (ZDNet special report) | Download the PDF version (TechRepublic)

The problem is that enterprises haven't proved to be very good at the automation and scale he rightly celebrates. But the bigger problem may be that there simply is no way to deliver the agility that public cloud can, as AWS' Matt Wood once detailed with reference to data science:

Those that go out and buy expensive infrastructure find that the problem scope and domain shift really quickly. By the time they get around to answering the original question, the business has moved on. You need an environment that is flexible and allows you to quickly respond to changing big data requirements. Your resource mix is continually evolving—if you buy infrastructure it's almost immediately irrelevant to your business because it's frozen in time. It's solving a problem you may not have or care about any more.

AWS, Microsoft, Alibaba, and Google are in the business of delivering cloud excellence. Other enterprises...aren't. That's not to say that companies can't do a great job of building infrastructure, but that's hardly the core business of most companies. Business logic matters a great deal to them, but infrastructure probably shouldn't. It's not an efficient use of capital. 

For the moment, we still have 95% of IT spend chasing private data centers, and that's a problem. It's a problem because it means that those enterprises are depriving themselves of the agility they rightly claim to get from public cloud.

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Image: iStockphoto/gorodenkoff

By Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.