Just How Large is the AWS Market Share?

Although Amazon Web Services (AWS) is undoubtedly the Infrastructure-as-a-Service (IaaS) market leader, because of the way Amazon’s competitors announce their revenue figures, it is difficult to calculate AWS’ market share size.

For instance, Microsoft includes non-cloud services in its “Intelligent Cloud” revenues, while Alphabet combines the revenues from Google Cloud Platform and Google Workspace as a single metric in its quarterly statements.

The reluctance of AWS´ major competitors to break out cloud revenues has resulted in analysts producing dissimilar market share statistics. For example, analyst firm Canalys calculated the AWS market share at 31% in 2020 based on IaaS revenues alone; Gartner determined that it was 40.8%, based on revenues from cloud infrastructure and platform services; and IDC (which includes revenues from system infrastructure software) calculated the AWS market share at 24.1%.

Is the AWS Market Share Increasing or Decreasing?

One can determine whether the AWS market share is increasing or decreasing by comparing analysts´ calculations from multiple years. Unfortunately, both Gartner and IDC recently changed the way they calculate market share percentages (to include PaaS and system infrastructure software respectively), so previous years´ calculations from these two firms do not align with current market share percentages.

Calculations made by Canalys reveal that the AWS market share increased between 2017 (32.3%) and 2019 (32.6%) but decreased in 2020, a consequence of the COVID pandemic. As revenues from these services would have been included in competitors´ financial statements, it is not clear whether AWS´ market share for IaaS services actually decreased or not.

Complexities Using Revenue-Based Market Share Analyses

In addition to not having like-for-like figures for analysts to compare market sizes, revenue-based market share analyses don´t tell the whole story. It is quite possible that AWS customers – having been in the market for the longest period of time – are further along their journeys to cloud maturity and are better at optimizing costs than customers of their market competitors. Consequently, the AWS market share by utilization could be 50% or higher.

Conversely, Microsoft Azure customers have the opportuniy to reduce their costs via Azure Reservations, while Google Cloud Platform (GCP) helps customers eliminate over-provisioning by offering customizable VM instances. Consequently AWS market share by utilization could be much lower than analysts calculate if Azure and GCP customers use their clouds more efficiently.

AWS Market Share Should Not Influence Deployment Decisions

AWS market share should not impact deployment decisions. Those should be based on cost, performance, and security, along with a knowledge of how AWS works. This last factor is important because a lack of knowledge can result in overspends, incompatibilities, misconfigurations, and applications being deployed on the AWS Cloud with security vulnerabilities.

If you deploy workloads on the AWS Cloud, you should maintain complete visibility of your AWS environment. Depending on the compute service(s) used, you may be unable to monitor activity below the “level of abstraction”. The visibility issue is not unique to AWS and exists on every cloud; although there are tools available in the AWS marketplace that can help resolve the issue, it is important that you know how to use them.