Australian IaaS market grows by a third

Local market growth outstrips global average, Gartner says

New figures released by Gartner reveal that last year the growth rate of the Australian infrastructure as a service market outstripped the global average.

The Australian IaaS market grew 32.5 per cent in 2017, compared to a global average of 29.5 per cent, the analyst firm revealed in a new report.

The local IaaS market was worth A$393 million in 2017, Gartner said. The global cloud market reached US$23.5 billion, up from $18.2 billion.

Amazon remained the top IaaS vendor, Gartner said, with revenue of $12.2 billion trailed by Microsoft ($3.1 billion), Alibaba ($1 billion), Google ($780 million) and IBM ($734 million).

“The top four providers have strong IaaS offerings and saw healthy growth as IaaS adoption is being fully embraced by mainstream organisations and as cloud availability expands into new regions and countries,” said Gartner research director Sid Nag.

“Mainstream cloud adoption is being driven by organizations of all shapes and sizes and in every industry,” state’s a new Gartner report, Market Share Analysis: IaaS and IUS, Worldwide, 2017.

“Organizations are moving from ‘experimenting’ with cloud to using IaaS in business-critical operations and are most comfortable using the leading ‘safe choice’ IaaS providers,” the report states.

Microsoft registered massive year on year IaaS growth of 98 per cent, Gartner said.

China’s Alibaba enjoyed growth of 63 per cent, which Gartner said reflected its R&D investment.

“Alibaba has the financial capability to continue this trend and invest in global expansion, giving the company potential to become over time an alternative to the global hyperscale cloud providers in select regions,” Gartner said.

Although the market is dominated by the top four providers —Amazon alone accounts for close to 52 per cent of the IaaS market — there are opportunities to compete by targeting niche segments, Gartner said.

“However, despite a healthy body of niche providers, the dominance of the hyperscale providers is what is driving mainstream cloud adoption,” the report states.

Together the top four account for 47 per cent of the combined IaaS and infrastructure utility services (IUS) market, the analyst firm said.

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