AWS: The market leader?
Although in the past decade, Microsoft, Google, Oracle, and many others have progressed with cloud offerings and significantly increased their market share, AWS was the first to take this opportunity. Many experts think this is the primary reason AWS is still a market leader. Are there other reasons too?
How did it start?
AWS was the first cloud service provider that launched in 2006 and is still the largest cloud provider in the world. Many companies which were on-boarded initially to AWS kept using AWS as changing cloud providers means a lot of training and hassles.
Netflix, NASA's JPL, Adobe, Airbnb, Reddit, and Slack were a few of the initial customers of AWS and all of them were serving a huge customer base and dealing with high amounts of data. They directly or indirectly advertised the capabilities of AWS and how cloud computing could transform businesses. Initial priorities were getting scalable, cost-effective, and fault-tolerant solutions and AWS met all these needs.
It motivated start-ups, medium-sized businesses, and government organizations to embark on a cloud journey.
Cloud Market Share 2023
There is no decline in the cloud adoption rate, no doubt. However, becoming a cloud provider can be super challenging. Every year, new database technologies, and the demand for faster analytics systems are coming up. Same time, increasing focus on data privacy, low downtime, and high reliability have made cloud providers research and innovate continuously.
Large companies, especially, AWS, Azure, and GCP are investing a lot every year to be on the top. As a result, they hold almost 60% of the market combinedly.
To further increase awareness, all of these big players are providing a cost-effective pricing model. Ex- Free credit, free tier services, 12-month free offer, etc.
It definitely is helping small businesses to have a low-risk entry point.
The market share certainly changes based on demographics and customers.
However, an approximate ratio as of now:
Why is AWS a market leader?
Although Google Cloud and Azure have shown growth compared to AWS, both of them are quite behind in terms of acquired customers. What are the experts' views on that?
AWS started quite early. It gave a lot of advantages to AWS to tap the market and keep providing good service and keep the customers in the long term.
AWS's success can be primarily attributed to its innovation, customer-focused approach, and wide list of services. There are more than 200 services AWS provides currently in 2023.
We have outlined a few popular web services which generate significant revenue for AWS.
AWS had significantly more services and a wide range of features than any other cloud provider at the initial stage. However, Azure started a lot of services in a short span of time, and with the acquisition of ChatGPT, it is offering popular OpenAI services for language translations, sentiment analysis, etc. It would definitely increase the user base for Azure in the near future.
Generally, Azure seems to focus more on building & deploying application-based services, and GCP focuses on machine learning (ML) & Microservices (Container-based) technologies. Each of them has100+ services and most of them are focused on providing virtual servers, storage, data lakes, big data & analytics, AI, ML, cloud network, containers(Kubernetes and microservices), IoT applications, Language models, and a lot more.
The below figure shows the comparison (count of services) for AWS, Azure, and GCP respectively:
As we see a shift in the industry towards more and more Hybrid cloud solutions, ML, DevOps & MicroServices applications, Azure and GCP are probably more likely to grow faster.
AWS has clearly more product categories and a wide range of products in 2023, but, Azure and GCP are not far behind.