Cowen Analyst: Amazon Market Share Could Double by 2019

An analysis of Amazon Web Services‘ (AWS) financial model by Cowen and Company shows the potential for even bigger things from the public cloud infrastructure-as-a-service (IaaS) leader. According to Cowen analyst John Blackledge, AWS is likely to see annual revenue of $19 billion by 2019, but it will also nearly double its market share.

As with some other major publicly traded cloud companies, Amazon has been riding high on solid earnings and a strong share price tag. Its valuation is currently at approximately $24 billion. But Blackledge analyzed Amazon‘s (AMZN) financial model and has come out with even stronger predictions related to the public cloud company.

In an article on StreetInsider, Blackledge was quoted as saying Cowen and Company developed a price/volume framework using data based on Amazon’s allocation of spending by product type and its pricing given consumption. As Blackledge noted, Amazon’s business is currently made up of compute (40 percent of its overall business), storage (31 percent), database (13 percent) and other cloud services (18 percent).

In terms of the public cloud market, it’s no secret that Amazon has the lion’s share of the market. Using public cloud market estimates from the likes of IDC and 451 Group, Cowen and Company determined that Amazon currently has about 19 percent market share within the public cloud, which includes a variety of offerings like IaaS, platform as a service (PaaS) and overall hosting.

Based on those figures and Cowen and Company’s own analysis, Blackledge said the current 19 percent market share is likely to increase to 37 percent by fiscal year 2019. That’s a huge increase, bumping up Amazon’s overall public cloud market share by nearly twice what it currently is over the next five years.

At the same time, though, industry experts aren’t arguing the growing strengths of Amazon’s largest public cloud competitor, Microsoft Azure (MSFT). Google‘s (GOOG) cloud revenue is also growing, as is the revenue of a variety of other IaaS and PaaS providers.