Gartner has released their latest report on the Cloud Infrastructure-as-a-Service (IaaS) market and the numbers are quite revealing and are a good discussion point. Based on Gartner's data, the cloud IaaS market grew by 31%year-over-year. Amazon captured 44.2% of this market followed by Microsoft's Azure platform with 7.1%, then Alibaba's platform with 3%, followed by Google at 2.3%, and finally Rackspace at 2.2%. All other cloud IaaS providers, when combined, held the remaining 41.2% of the market, but all of these held less than 2%. In addition, this combination of every other provider was still less revenue than Amazon by itself.

But, what is more telling in the data is the year-over-year growth as a percent because it gives us a little more insight into what really seems to be happening. Amazon grew 45.9%, Microsoft grew 61.1%, Alibaba grew 126.5%, Google grew 100%, Rackspace grew only 5%, and all other cloud providers together grew 13.2%.

My take on this data is the IaaS cloud race is first really narrowing to four main players - Amazon, Microsoft, Alibaba, and Google. That said, while Alibaba is a major player in the China market and moving out, Alibaba will face some very tough competition from the other three. In terms of cloud IaaS, the dominate players will remain Amazon, Microsoft, and Google. 

But the real question is can Microsoft or Google ever catch Amazon. My personal take is no, they won't, but this is ok. IaaS will remain a very important part of any company's cloud strategy for years to come, but IaaS isn't really the long-term driver of the cloud. The real shift will be the move to cloud native applications and advanced workloads like blockchain-as-a-service, IoT, machine learning, artificial intelligence / cognitive services, and so forth. When we look at these advanced services, this is where Microsoft and Google really excel and these are areas where they will pull ahead of Amazon. Amazon, of course, is focused on becoming a powerhouse in these fields, but they are behind in some of these areas just based on what Microsoft and Google have been doing for years. When these elements are considered in addition to IaaS, I suspect we will see a little more even distribution of market between these three.

As for players like IBM, Oracle, Alibaba, and so forth, they are likely to become more regional or niche players. Alibaba will remain very strong in the China market and likely parts of APAC. IBM has many very good cloud offerings, but until Bluemix and SoftLayer merge into a single, fully integrated cloud story with services that really drive developers, IBM will be a very strong niche player. As for Oracle, their strength is in the SaaS space with their core business apps and this is what will drive their cloud more than anything. 

Regardless of how the market changes over the next couple of years, it will be an interesting ride. Anyone creating services in the cloud need to be prepared for significant changes.