The cloud services segment showcases one of the highest growth rates in the tech industry. The projected combined revenue of some of the main cloud computing companies for the current year exceeds $100 billion.
Based on financial reports and growth rates, as well as on the increasing demand for cloud services, it is estimated that the combined revenue of Microsoft, Amazon, IBM, Salesforce, SAP, Oracle and Google, in 2018, will surpass $100 billion. If we add 3 other major players to the list- ServiceNow, Workday and VMware - we are looking at a combined estimated revenue of over $110 billion.
Factors Driving the Growth of the Enterprise Cloud Segment
The rapid growth of this segment is fueled by the increasing interest of companies in the cloud and what it has to offer. More and more enterprises are looking to harness the cloud’s potential for innovation, while enjoying added benefits, such as increased cybersecurity, as well as financial, technological and operational advantages.
Top players in the cloud computing segment are striving to stay ahead of the game, by directing massive funds towards research and development, by initiating key collaborations and by investing in ad campaigns.
Major Cloud Vendors
The leader of the pack is undoubtedly Microsoft, as it covers all 3 segments of the enterprise cloud, more precisely IaaS, PaaS and SaaS. Microsoft reported a revenue of $6 billion in the first quarter of this year, with a growth rate of 58%, taking the lead in the enterprise cloud vendors category. Microsoft secures its number one position through its efforts of developing AI, ML and blockchain technology, and through the support is offers customers in implementing these technologies.
Known for its electronic commerce unit as well as for its cloud services unit, Amazon.com Inc. continues its development.
At the end of 2017, its electronic commerce branch registered a net revenue of almost $178 billion, with more than 50% of its revenue coming from electronics and media. Amazon.com manages to stay ahead of the competition in the electronic commerce category, and it is interesting to notice that traders can now gain valuable insight by using Amazon product research tools.
Regarding its performance in the enterprise cloud market, Amazon’s AWS unit had a revenue of $5.44 billion at the end of the first quarter of 2018, with a growth rate of 49%, coming in second, right after Microsoft. If we refer exclusively to the IaaS layer of the enterprise cloud then AWS is by far the leader in this category.
IBM earned its place among major cloud vendors as it is helping its business clients transition from legacy systems to the cloud. IBM covers all 3 segments of the enterprise cloud (IaaS, PaaS, SaaS), which means it can offer more options to its clients. Its complex approach also makes IBM an attractive partnership option for third-party developers. IBM solutions integrate AI and ML technology, paired with the advantages of the cloud, making it extremely competitive in today’s market.
A highly successful SaaS business-Salesforce- holds the fourth position in our rankings. Based on its evolution up until this moment, experts note that the best strategy for maintaining its ranking involves becoming a prominent player in the PaaS segment.
This year, SAP’s cloud revenue is expected to surpass in on-premises revenue. As the company recently partnered up with Amazon and Google, complementing its lasting collaborations with Microsoft and IBM, it clearly sends the message that it will perform well in a multi-cloud environment.
Oracle holds a comfortable position, as its SaaS revenue comes close to $5 billion. Moving into the PaaS segment by launching Oracle Autonomous Database and other solutions, it is surely headed towards a bright future.
At the beginning of the year, Google announced that in the last quarter of 2017 the revenue for its Google Cloud Platform surpassed $1 billion. However, the financial report for the first quarter of this year didn’t include any updated figures for its cloud services.
ServiceNow is another great example of an enterprise cloud vendor that strives to increase its performance, maintaining a revenue growth of 40%.
Workday reported an annual revenue of $2 billion, with a growth rate of 40%. As it moves into the PaaS segment it will surely continue to grow.
VMware is another company that is expected to grow, rapidly becoming an important vendor in the multi-cloud and hybrid cloud setting.