According to new data released by Gartner, the IaaS public cloud services market grew by more than 40% in 2020 and reached a high of $64.3 billion. Amazon far outpaced the rest of the market with $26.2 billion of revenue in 2020 and a commanding 41% market share.
Amazon saw growth of nearly 29%, which was less than other companies but was reflective of their current domination of the IaaS public cloud services market.
Microsoft came in at number two with $12.7 billion in revenue in 2020 and almost 60% growth. Microsoft's growth numbers were spurred by the COVID-19 pandemic, which Gartner said drove interest among Microsoft Azure customers "to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail."
The rest of the list includes Alibaba, Google and Huawei. Alibaba was the most dominant IaaS provider in China and saw growth of nearly 53% in 2020, bringing in more than $6 billion. According to Gartner, Alibaba benefited most from the education industry, with a growth rate of 105%. The growth was attributed to an increased number of downloads of DingTalk, Alibaba's enterprise communication and collaboration platform.
Huawei managed to fight its way into the top five thanks to yet another year where it saw 200% growth in the IaaS market. The company made $2.7 billion in revenue from the market in 2020, and 90% of this came from the Greater China region.
Google saw a 66% IaaS revenue increase to almost $4 billion in 2020, thanks to the retail, government and healthcare sectors. According to Gartner, the technology giant also benefited from an increased focus on "supporting the development and deployment of cloud applications in both a hybrid and multicloud model," according to Gartner.
Gartner noted that 80% of the market is currently controlled by the top five IaaS providers but added that almost 90% of all IaaS providers saw growth in 2020.
Sid Nag, research vice president at Gartner, said hyperscale providers are continuing to build distributed cloud and edge solutions that extend the public cloud's reach into private and on-premise locations, addressing the needs of organizations relating to data sovereignty, workload portability and network latency.
"This fact, coupled with reliance on the public cloud by a majority of organizations during the pandemic, drove another year of double-digit market growth in 2020. After 2019, Huawei made a hard pivot away from selling equipment to investing heavily in their cloud services business which is starting to yield results," Nag said.
"The era of CIOs investing in cloud IaaS and platform as a service (PaaS) discretely is long over. While the cloud market will continue to grow, the real opportunity for providers comes from growth in cloud-adjacent technology markets such as edge, 5G and AI, as CIOs look to invest in technologies that address their complex and emerging use cases."