Microsoft Corp.’s Azure leads the business public cloud services market in overall revenues, writes Wikibon Cloud Analyst Brian Gracely in his analysis, “Public Cloud Markets get More Competitive.”  Amazon Web Services (AWS) comes in a fairly close second but Microsoft is growing at an incredible 95.4 percent annually, the fastest of any cloud service on Gracely’s extensive list, while Amazon is growing at 65 percent.

Salesforce.com, Inc.  is third and growing at 22.9 percent, and IBM is fourth but growing at 67.8 percent. Adobe Systems Inc. is fifth, growing at a respectable 65 percent. SAP SE is sixth but is growing at 94.1 percent, second only to Microsoft’s Azure, implying that it will move up it if can keep up that growth rate over the next two years. Oracle is seventh and Google is lagging in eighth place. One other surprise, Hewlett-Packard Enterprise’s Heleon, doesn’t make the list at all.

It should be noted that Gracely’s analysis doesn’t include private cloud. The big traditional outsourcers also don’t make this list even though cloud services would seem a natural extension of their core businesses. Certainly cloud competes with those core businesses.

As its headline states, the market is becoming more competitive. And, he writes, the leaders are starting to differentiate as individual strategies become clearer. This differentiation will probably result in companies using multiple clouds. Gracely analyzes the different strategies of Microsoft Azure, AWS, IBM and Google, in part because these are among the most complex of the major competitors.

He also looks at smaller IaaS and multiple service providers, a group that includes HP’s Helion Cloud, VMware Inc.’s vCloud Air, EMC’s Virtustream and Digital Ocean Inc.. None of those is large enough to make it into Gracely’s list of individual contenders. It’s questionable whether these smaller providers will be able to match the economies of scale of Azure, AWS, IBM and Google.

Another question is how much network footprint will be a factor. If it becomes critical, then the telcos and cable companies, which have extensive presence but have yet to build large cloud businesses, may get a leg up. Another open question is how much geographic presence – whether a provider has physical servers inside a specific country or other geographical entity – will grow in importance outside of the United States. Gracely predicts that the growth of Internet of Things and the industrial Internet will make proximity of cloud data centers increasingly important to end-customers.

He also makes strong points about public cloud services being a growing part of the IT of the immediate future. Public clouds, he writes, are both a viable alternative for enterprise IT customers and a legitimate threat to enterprise vendors. As the market continues to grow at a rapid pace, businesses without a well-defined public cloud strategy and new projects in public cloud will find themselves at a competitive disadvantage within the next 12-to-18 months.

Photo via lmaresz via Pixabay