Amazon, Microsoft And IBM: What Cloud Questions Must Be Answered In 2015?

Jan. 06, 2015 10:12 AM ETAMZN, IBM, MSFT11 Comments
Brian Nichols profile picture
Brian Nichols


  • The public cloud is expected to become a $190 billion market by 2020, and cloud infrastructure services will be a big reason why.
  • AMZN, MSFT and IBM are numbers 1, 2, and 3, respectively, in cloud infrastructure services.
  • After a wild 12-month span for these cloud leaders, each have something to prove in 2015, which could dictate their performance over the next five years.

Forrester Research estimates that between the years of 2013 and 2020 the public cloud market will grow from $58 billion to $191 billion. A large chunk of that growth will come from cloud infrastructure services, a segment that accounts for roughly 20% of the public cloud market and is growing at nearly 50% annually with $14.5 billion in trailing 12-month revenue according to Synergy Research. Within this cloud infrastructure services space lies market leaders (AMZN), Microsoft (NASDAQ:MSFT) and IBM (IBM), respectively, according to Synergy Research's most recent data. Note: Synergy Research's data accounts for infrastructure as a service, platform as a service, and hybrid/private cloud in its rankings.

But in a highly competitive industry, where big valuations and revenue growth is at stake, each of these noted companies have some big questions to answer in 2015.

Can increase appeal with enterprise customers?'s Web Services (AWS) business is undoubtedly the cloud infrastructure services market leader. Synergy Research estimates that AWS controls 27% of the cloud infrastructure services market, and despite having just over $1 billion in quarterly revenue from the segment, Evercore estimated in November of 2013 that AWS was worth $50 billion, mainly due to its growth prospects.

However, a lot has changed since November 2013. For one, AWS' market share of the cloud infrastructure space has fallen from well over 30% to 27%, as its growth has underperformed the likes of Microsoft and IBM. In essence, one could assume that much of's stock losses in 2014 were in connection to the share loss of AWS and the asset's devaluation.

Granted, AWS still has a comfortable lead over its competitors, and if it can hold 27% then the asset stands ready to generate substantial revenue growth over the next five years. However, with AWS already having more than one million active customers

This article was written by

Brian Nichols profile picture

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

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