Despite Amazon Web Services’ commanding lead, competition in public cloud computing is tightening, according to a new report from Synergy Research Group.

The study is the latest in a series of market updates that the analyst firm publishes every quarter after the industry’s top providers post their earnings. Synergy has unsurprisingly found that Amazon.com Inc. continues to lead the infrastructure as a service segment with a market share of 45 percent. That means it’s bigger than its next three rivals combined: Microsoft Corp., Google Inc. and IBM Corp.

But its momentum is starting to erode while rivals are gaining ground. The company’s cloud revenues rose 55 percent to $3.23 billion in the three months ended Sept. 30, while Microsoft, its biggest competitor, saw revenue from its Azure platform surge 116 percent during the same period. The software giant didn’t provide specific numbers in its earnings report but did reveal that demand for compute instances was particularly strong and usage more than doubled year-over-year as a result.

Google, meanwhile, told shareholders last week that its infrastructure-as-a-service platform is experiencing “substantial revenue growth” but without sharing any concrete sales figures.

According to Synergy Chief Analyst and Research Director John Dinsdale, the key to the three providers’ rapid growth is their aggressive investment in infrastructure. “Scale is the name of the game, especially in the public cloud markets,” he said in a prepared quote attached to his firm’s new report. “Amazon, Microsoft and Google continue to invest huge amounts in their hyperscale data center infrastructure, and all three have recently expanded their data center footprints and also announced plans to open up more geographic regions in the coming months.”

Of particular note is Amazon’s recently announced plan to launch 9 new cloud facilities in Canada, China and the UK by the end of 2017. Google, meanwhile, will open 10 data centers of its own during the same period to keep up with its rival. Microsoft also has been steadily expanding its infrastracture presence lately.

“This scale is the prime reason why they are able to gain market share and pressure smaller players into consolidation or refocusing their cloud activities,” Dinsdale added. But he highlighted that some so-called tier 2 providers are nonetheless maintaining strong growth. Synergy’s report reveals IBM Corp. leads the managed private cloud category, while Oracle Corp. is making strong gains in the rapidly expanding platform as a service market.

Overall, the research firm estimates that the cloud infrastructure market has now passed $8 billion in quarterly revenues and will grow at 50 percent per year going forward.

Image via Synergy Research Group