The infrastructure as a service (IaaS) market in Australia grew 40.4% in 2020 to more than $A1.4 billion in total revenue, up from $A1 billion in 2019, according to Gartner, Inc. Amazon retained the No. 1 position in the local IaaS market in 2020, followed by Microsoft and Google.

“Australian organisations accelerated their commitment to public cloud in 2020 and are now investing to support new opportunities in 5G, cloud-native applications, AI and data analytics,” said Michael Warrilow, research vice president at Gartner.

“Leading cloud providers continue to invest locally to overcome the tyranny of distance,” Warrilow said. “It’s no longer just about Sydney or Canberra. They are adding new regional capabilities spanning from Perth in our west, Auckland in the east, Jakarta and Kuala Lumpur to our north and Melbourne in the south-east.”

In 2020, the top three IaaS providers accounted for 70% of the Australian market (see Table 1).

Table 1. Australia IaaS Public Cloud Services Market Share, 2019-2020 (Millions of Australian Dollars)

Source: Gartner (June 2021)

*Totals may not add up to 100 due to rounding.

Global market shows strong growth

The worldwide infrastructure as a service (IaaS) market grew 40.7% in 2020 to total $US64.3 billion, up from $US45.7 billion in 2019, according to Gartner, Inc. Amazon retained the No. 1 position in the IaaS market in 2020, followed by Microsoft, Alibaba, Google and Huawei). In 2020, the top five IaaS providers accounted for 80% of the market, and nearly 90% of all IaaS providers exhibited growth globally.

Amazon continued to lead the worldwide IaaS market with $US26.2 billion of revenue in 2020 and 41% market share (see Table 2). Amazon’s 28.7% growth was slightly slower than that of the market, with their sales growth primarily reflecting increased customer usage.

Table 2. Worldwide IaaS Public Cloud Services Market Share, 2019-2020 (Millions of U.S. Dollars)

Source: Gartner (June 2021)

*Totals may not add up to 100 due to rounding.

Microsoft maintained the No. 2 position in Gartner’s IaaS market share with nearly 60% growth, reaching $US12.7 billion in revenue in 2020. The global healthcare crisis and disruption in workplace environments during the pandemic era drove increased demand from existing Microsoft Azure customers to migrate mission-critical workloads, such as from healthcare applications with AI-assisted bots, digital twins in manufacturing and e-commerce in retail.

The dominant IaaS provider in China, Alibaba, grew 52.8% in 2020 with revenue surpassing $US6 billion, up from $US4 billion in 2019. In 2020, Alibaba saw its highest growth rate in the education vertical at 105%, driven by downloads of Alibaba’s enterprise communication and collaboration platform DingTalk  among employees and students working and studying from home.

After its second consecutive year of over 200% growth in the IaaS market, Huawei broke into the top five IaaS vendors for the first time in 2020, with $US2.7 billion in revenue. Over 90% of this revenue comes from Greater China, a region that continues to see rapid cloud market growth.

Google’s IaaS revenue grew 66% to reach nearly $US4 billion in 2020. Spending from the retail, government and healthcare sectors helped drive Google’s growth in IaaS in 2020, as did their focus on supporting the development and deployment of cloud applications in both a hybrid and multi-cloud model.