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Are Amazon Web Services' days as the guaranteed leader of the infrastructure-as-a-service (IaaS) market numbered? There is some indication that Amazon is losing ground to the other big boys of IaaS, and according to a new report from Synergy Research Group, Microsoft and IBM have both made significant gains.

Chris Talbot

July 29, 2014

2 Min Read
Jeff Bezos founder and CEO of Amazon
Jeff Bezos, founder and CEO of Amazon

Are Amazon Web Services‘ (AWS) days as the guaranteed leader of the infrastructure-as-a-service (IaaS) market numbered? There is some indication that Amazon is losing ground to the other big boys of IaaS, and according to a new report from Synergy Research Group, Microsoft (MSFT) and IBM (IBM) have both made significant gains.

Data from the second quarter of 2014 shows that in terms of growth, Microsoft and IBM are leading the pack. Amazon, which at one time could consider itself bigger than its four closest competitors, can apparently no longer make that claim, according to Synergy. Microsoft and IBM both grew substantially, with Microsoft increasing its cloud infrastructure services revenue 164 percent in the quarter and IBM increasing by 86 percent.

Salesforce.com (CRM) saw a 38 percent increase in cloud infrastructure services revenue, and Google (GOOG) experienced 47 percent growth in that same period. Even so, Google’s growth isn’t keeping up to its biggest rivals, the research firm noted.

And as for Amazon, the company has experienced its setbacks. Tougher competition is being blamed for Amazon’s reduction in revenue growth, which Synergy pegged at 49 percent during the second quarter.

“It has become clear that AWS finally has some tough competition to face,” said John Dinsdale, a chief analyst and research director at Synergy Research Group, in a prepared statement. “Until this quarter it could claim that it was bigger than its four nearest competitors, but now at least one jewel has fallen from its crown. While it remains a formidable leader of the market, Microsoft is making some huge strides in IaaS and PaaS while IBM now has clear leadership in the private and hybrid infrastructure services segment.”

Some believe that Amazon will in time lose its leadership position to Microsoft in what is currently a $13 billion market.

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