AWS Market Share: Revenue, Growth & Competition (2020)

Amazon Web Services (AWS) was founded back in 2006 and was the first company to offer modern cloud infrastructure as a service. Since its launch, AWS has become a staple for both hosting and data storage in particular.

What is AWS?

Amazon Web Services (AWS) is a cloud service provider that uses Amazon’s own infrastructure and experience. Rather than a division of the company, like Microsoft’s Azure is, AWS is a subsidiary company of Amazon.

AWS offers a wide range of cloud services, from basic hosting and deployment to analytics, blockchain, machine learning, and more.

AWS offers a variety of cloud computing products.
AWS offers a variety of cloud computing products.

All the storage and computing resources come from a distributed network of data centers spread across the globe, to facilitate less latency and a better experience for your end-users.

AWS offers a hosting and storage service called Amazon Simple Storage Service, more commonly known as Amazon S3, as well as elastic block storage, and more.

AWS Currently Has a 5.8% Market Share in Web Hosting

The first, and most accessible data, to examine, is AWS’s market share of the web hosting industry. 

According to W3Techs, these are the current, up-to-date cloud market share numbers for web hosting services across the globe:

Web hosting market share. (Source: W3Techs)
Web hosting market share. (Source: W3Techs)

Amazon is in second place, neck-and-neck with GoDaddy Group, at 5.8%. Google is currently in 5th place at 3.2% and Microsoft is the clear straggler at just 1% market share of commercial and private web hosting combined.

Even though AWS isn’t specifically a hosting company, they’ve already overtaken Endurance Group (behind cheap shared hosting giants Bluehost and Hostgator) and established a clear lead among the three cloud giants.

And if you don’t find the number 5.8% impressive, let’s take a closer look at what that actually means.

There are Over 9 Million Live Websites Using AWS

Just a few percent of the web hosting market is a big deal. To further illustrate exactly how big, we’re going to look at the live number websites currently hosted by AWS.

According to BuilWith’s latest data, an estimated 9,054,410 live websites are hosted by AWS.

Amazon usage statistics from 2012-2020. (Source: BuiltWith)
Amazon usage statistics from 2012-2020. (Source: BuiltWith)

9 million. That’s more than the entire population of Switzerland.

AWS is the hosting service provider of choice for a lot of global enterprises and well-known companies, including Netflix, Facebook, and the BBC.

Because of data-intensive video, Netflix alone uses over 100,000 server instances for its storage and computing needs. Many leading companies use AWS to host their websites and data.

Cloud hosting usage distribution in the top 100k sites. (Source: BuiltWith)
Cloud hosting usage distribution in the top 100k sites. (Source: BuiltWith)

With 34% market share among cloud hosting providers in the top 100k, Amazon owns the bigger piece of the visible internet out of the big three.

Google Cloud comes in at 13% and Microsoft Azure clocks in at just 7%, a share that’s over 4 times smaller than AWS.

But of course, the IaaS market isn’t just about web hosting either. In a survey, 61% of technical professionals said they were currently running a cloud app with AWS. Amazon’s platform as a service (PaaS) products for deployment are also the market leader.

AWS Historical and Current Revenue

AWS quarterly and annual reports over the past ten years reveals a story of incredible growth.

In just seven years, the revenue has increased more than ten times over.

AWS annual revenue growth from 2013-2019. (Source: Statista)
AWS annual revenue growth from 2013-2019. (Source: Statista)

From $3.1 billion in 2013 to over $35 billion in 2019, the revenue growth of AWS has been steady, to say the least. It has shown that a cloud platform can not only be a billion-dollar business but a multi-billion, maybe even a hundred-billion dollar business.

But as it has grown massive in both revenues and market share, it has inevitably started to slow down as other cloud service upstarts speed up.

Will AWS Keep Growing its Share of the Cloud Market?

First, let’s take a look at the expected growth rate in the public cloud market in general. According to expert analysts at Gartner, total public cloud revenues will grow from $227.8 billion in 2019 to $354.6 billion in 2022.

Worldwide public cloud revenue forecast. (Source: Gartner)
Worldwide public cloud revenue forecast. (Source: Gartner)

IaaS is forecasted to explode with an impressive 24% YoY growth rate. Together, IaaS and PaaS markets are expected to grow by more than $58 billion in revenue over the coming years.

Next, let’s take a look at AWS’s growth rate. AWS had an explosive growth rate early on but has started to slow down.

AWS revenue growth. (Source: CNBC)
AWS revenue growth. (Source: CNBC)

As you can see, 2019 is the first year the growth rate has dipped beneath 40% in over 5 years, and it remained below 40% consistently for quarters two, three, and four. 

According to data from Synergy Research Group, AWS is already starting to slow down compared to the overall market, while major competitors like Microsoft, Google, Alibaba, and Tencent are still growing faster and increasing their market share in the process.

Cloud provider competitive positioning. (Source: Synergy Research Group)
Cloud provider competitive positioning. (Source: Synergy Research Group)

For example,  Microsoft Azure has established itself as one of the market leaders, by clocking in at 62% YoY growth Q4 2019, far above the average growth rate.

The other cloud solutions have matured while AWS is no longer the clear-cut innovator and market leader anymore. 

Plus, many large enterprises don’t seem to like the idea of being solely reliant on a single cloud provider. That has led to the partial migration of some of AWS’s highest caliber clients, like Apple moving $400-600 million of cloud spending to Google Cloud Platform.

All in all, it seems likely that AWS will continue to grow at a sustainable rate, but lose market share as the pie grows to competitors that are growing at a faster clip, like Azure or Google.

Is AWS Secure?

AWS is dedicated to maintaining a secure and compliant platform for its customers. You have scalable access control and encryption available for any sensitive data you want to process or store in the cloud.

AWS security features – security, identity, and compliance.
AWS security features.

Ongoing threat monitoring will help you detect and deal with potential security threats in real-time before they lead to an actual problem. But of course, no matter how secure a system is, you can’t always prevent user error.

Even the high profile Capital One case, which was caused by a disgruntled former employee, happened because sites had misconfigured their firewalls, leading to a vulnerability.

Vulnerabilities on individual accounts and websites due to misconfiguration are hard to avoid when you let customers configure and set up their own websites and systems.

AWS vs. Google Cloud Platform

So far, we’ve covered AWS’s general market share in cloud computing and services, but we haven’t looked at how they stack up against a competitor in particular. 

In this section, we’ll do a deep dive into both AWS and the Google Cloud Platform, and see who comes out on top in different areas.

First, let’s take a look at how they stack up against each other in web hosting market share according to W3Techs data.

Historical web hosting providers usage.
Historical web hosting providers usage. (Source: W3Techs)

Surprisingly, over the past year, both Amazon and Google have lost a tiny bit of market share. AWS dropped 0.1% to 5.8%, and Google dropped 0.2% to 3.2%.

But when you examine the BuiltWith data on live websites, the numbers are much closer:

Cloud hosting usage distribution.
Cloud hosting usage distribution. (Source: BuiltWith)

At 9 million and 8 million websites a piece, they are head and shoulders above other IaaS providers like Microsoft, at only 767,602 sites.

When it comes to the complete cloud revenue from IaaS, PaaS, and private cloud services, AWS has a much larger advantage over Google in terms of market share. 

Their revenues reflect this. AWS hit a $40 billion annual run rate earlier this year and Google Cloud Platform just hit a $10 billion annual run rate.

Research from Synergy Research Group, confirms how big the gap between AWS and the competition still is.

IaaS, PaaS, private cloud market share growth.
IaaS, PaaS, private cloud market share growth. (Source: Synergy Research Group)

In 2019, AWS had a 33% market share, Microsoft 16%, and Google was in third place with 8%.

But market share isn’t everything. One of the most important factors when it comes to hosting and cloud services is reliability.

Google Cloud Platform and AWS are also industry leaders when it comes to uptime, with both only reporting a total of about 300 hours between May 2018 and May 2019.

AWS, Azure, and GCP reported downtime.
AWS, Azure, and GCP reported downtime. (Source: NetworkWorld)

On the surface, AWS was the slightly more reliable option, with 338 reported hours vs. Google GCP’s 361.

Azure and Google Cloud couldn’t be more different, with a difference of over 1,500 hours.

For more information, read our in-depth Google Cloud vs AWS comparison where we cover infrastructure, services, security, networks, latency, and more.

AWS vs. Microsoft Azure

Amazon and Microsoft are currently the two biggest players in the cloud infrastructure market, so it makes sense to compare the two side-by-side.

But the web hosting side of things tells a different story, according to the latest data from W3Techs.

Historical web hosting providers usage.
Historical web hosting providers usage. (Source: W3Techs)

At 5.8%, Amazon is the second-largest hosting provider, whereas at 1% Microsoft comes in after niche players like the page builders Wix and Squarespace.

Even in the top 10,000 most visited websites, AWS has a significant lead according to the latest data from BuiltWith.

Cloud hosting usage in the top 10K sites. (Source: BuiltWIth)

Amazon has a 41% market share, while Azure is stuck at 6%.

When it comes to revenue, Microsoft doesn’t release Azure-specific revenue numbers, but Microsoft’s intelligent cloud services totaled $11.45 billion in revenue in 2019. It’s not clear what percentage is from Azure.

On the other hand, AWS did over $35.02 billion in revenue in 2019. More than three times Microsoft’s total volume.

AWS has a big lead, but Microsoft Azure is growing much faster. AWS registered only 34% YoY growth in Q4 2019 vs Azure’s impressive 62%

AWS also lost a $10 billion cloud infrastructure deal with the Pentagon to Microsoft (although Amazon is trying to sue and undo the decision.) 

Microsoft won another high-profile deal when they signed with the NBA for a multi-year deal to use Azure and Surface to provide personalized experiences to their customers.

High-profile public cloud deals going to Microsoft rather than AWS tip the scales even further in Microsoft’s favor, boosting their growth advantage.

But what if you care about more than just market share?

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