With a $50B run rate in reach, can anyone stop AWS? – TechCrunch

AWS, The rise of the Amazon Cloud Arm, has been growing rapidly in clips for over a decade. An early public cloud infrastructure vendor, it has leveraged its first-to-market position to become the most successful player in the space. In fact, one could argue that many of today’s startups would not have gone off the ground without forming cloud companies AWS Providing them easy access to infrastructure without having to build it themselves.

In Of amazon The most recent earnings report, AWS, generated revenue of $ 11.6 billion, good for a run rate of over $ 46 billion. This makes the next AWS milestone a run rate of $ 50 billion, something that could be reached in less than two quarters if it continues to drive revenue growth.

The good news for competing companies is that despite market size and relative maturity, there is still not much room to develop.

While cloud division growth is slow in percentage terms as it comes strongly against the law of large numbers in which AWS sometimes has to grow every quarter compared to a large revenue base. The result of this dynamic is that while the year-over-year growth rate of AWS has been slowing down over time – from 35% in Q3 2019 to 29% in Q3 2020 – the pace at which this annual revenue run rate is $ 10 billion. Adding part of it is accelerating.

AWS Re: At the Customer Conference this year, AWS CEO Andy Jessie, talking about the pace of change over the years, said it took the following months to increase its run rate by $ 10 billion to increase:

123 months ($ 0- $ 10 billion) 23 months ($ 10 billion- $ 20 billion) 13 months ($ 20 billion- $ 30 billion) 12 months ($ 30 billion to $ 40 billion)

Image Credit: TechCrunch (AWS data)

Stepping out of the above trend, it should take AWS less than 12 months to scale at a run rate of $ 40 billion to $ 50 billion. Explicitly stated, Jassy said “the rate of increase in AWS continues to accelerate.” He also took time to point out that AWS is now the fifth largest enterprise IT company in the world, ahead of entrepreneurial stalwarts such as SAP and Oracle.

What is amazing is that AWS achieved its scale so fast, not even existing till 2006. This growth rate begs us a question: Can anyone hope to stop the pace of AWS?

The short answer is that it is unlikely.

Cloud market scenario

A good place to start is a survey of the cloud infrastructure competitive landscape to see if there are any cloud companies that can capture the market leader. accordingly For Synergy Research, AWS remains firmly in front, and it does not appear that any competitor can catch AWS anytime soon unless some market dynamic changes.

Synergy Research Cloud Marketshare Leaders.  Amazon ranks first, Microsoft second and Google third.

Image Credit: Synergy Research

With about a third of the market, the AWS is the clear front-runner. Its nearest and fiercest rival is about 20% of Microsoft. AWS had revenue of $ 11.6 billion in the previous quarter, slightly in that perspective, compared to Microsoft’s $ 5.2 billion Azure result. While Microsoft’s equivalent cloud number is growing 47% faster than that of AWS, the number is steadily decreasing to gain market share and more revenue and fall prey to the same law of large numbers.