Having trouble understanding how cloud computing works and the difference between top cloud service providers? This guide will demystify it for you.
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Did you know that adopting cloud-based solutions can improve your business resilience?
From simplifying remote work to mitigating and recovering from business disasters, the advantages are plentiful.
But with so many A-players like Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) making strides in the industry, choosing the right provider for your specific needs can be a headache.
That’s why in this report, we’ll help you better understand cloud computing and analyze the top cloud service providers to make sure you make the right choice.
- Cloud computing is a type of technology that provides users with on-demand access to a shared pool of computing resources (e.g. servers, storage, apps, etc.).
- A cloud service provider is a company that provides customers with different computing services.
- Cloud computing services are commonly categorized into IaaS (Infrastructure as a Service), PaaS (Platform as a Service), and SaaS (Software as a Service).
- Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP) hold 65% of the global cloud computing market share and are the leading providers in the industry.
- The three main types of cloud providers are private cloud providers, public cloud providers, and hybrid cloud providers.
- Other notable cloud providers include Oracle Cloud, IBM Cloud, Alibaba Cloud, Salesforce Cloud, Rackspace, Digital Ocean, and OVHCloud.
- The cloud computing industry is expected to continue to grow in the following years, with machine learning and artificial intelligence (AI) being the main growth engines.
Cloud Computing Explained
Cloud computing is a technology model that enables convenient, on-demand access to a shared pool of configurable computing resources (such as networks, servers, storage, applications, and services) over the internet.
Instead of owning and maintaining physical hardware and infrastructure, users can access computing resources on a pay-as-you-go basis from a Cloud Service Provider (CSP).
What is a Cloud Service Provider (Cloud Provider)
A cloud service provider (CSP) is a company that offers a variety of computing services over the internet.
These providers enable businesses and individuals to leverage computing resources without the need to invest in and manage their own physical infrastructure.
These services are commonly categorized into Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS).
- IaaS involves the CSP offering virtualized computing resources over the internet, including virtual machines, storage, and networking. Users can rent these resources and eliminate the need for physical hardware.
- PaaS provides a platform that allows customers to develop, run, and manage applications without dealing with the complexity of building and maintaining the underlying infrastructure. It typically includes development tools, databases, and other components that facilitate app development.
- SaaS delivers software applications over the internet on a subscription basis. Users can access the software through a web browser without having to install it locally. For example, this can include email services or customer relationship management (CRM) tools.
Out of the three, SaaS emerged as the leader in 2022, capturing 56% of the revenue share.
The Largest Cloud Provider
The three leading cloud providers according to Statista are Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).
Amazon Web Services (AWS) stands as the largest cloud provider in the world with a 32% market share and a customer base of over 1.45 million businesses.
Microsoft Azure and Google Cloud Platform (GCP) come in second and third, respectively.
Different Types of Cloud Provider (Differences)
Now we know what a cloud service provider is, but what are the different types of cloud providers and how do they differentiate?
Below, we’ll get into the details of the three main types of cloud providers.
|Type||Use Case||Popular Choices|
|Private Cloud Provider||Provides cloud computing services exclusively to a single business||Amazon Web Services (AWS), Google, Cisco|
|Public Cloud Provider||Offers computing resources to several businesses or individuals||Alibaba Cloud, Digital Ocean, Huawei Cloud|
|Hybrid Cloud Provider||Allows companies to leverage functionalities from both private and public clouds|
Microsoft Azure, Oracle Cloud, IBM Cloud
Private Cloud Providers
A private cloud provider delivers cloud computing services exclusively to a single organization.
For businesses, this model comes with better security and control, as the entire cloud environment is isolated for the organization’s use.
Popular private cloud providers are:
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Public Cloud Providers
A public cloud provider is a company that offers computing resources to the general public or businesses.
Popular public cloud providers include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Although, these companies combine several models. For public cloud services, spending for 2023 could reach $600 billion.
Hybrid Cloud Providers
A hybrid cloud provider offers a combination of public and private cloud services.
This flexible model allows organizations to store sensitive data in a private cloud while leveraging the scalability of public cloud resources.
Notable hybrid cloud providers include Microsoft Azure, offering Azure Hybrid Benefit for integrated on-premises and cloud solutions, and AWS Outposts, extending AWS infrastructure to on-premises environments.
According to Flexera, 82% of enterprises use a hybrid cloud model.
Top 10 Cloud Providers (Comparison)
Okay, so we’ve covered the fundamentals of cloud computing – but who are the biggest cloud providers in the industry?
The three leading providers are Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).
But there are a lot more honorable mentions.`
Below, we’ll get into the details of each one and compare cloud providers:
|Company||Headquarters||Market Share||Annual Revenue|
|Amazon Web Services (AWS)||Washington, US||32%||≈$80 billion|
|Microsoft Azure||Redmond, US||22%||≈$34 billion|
|Google Cloud Platform (GCP)||California, US||11%||≈$7.4 billion|
|Oracle Cloud||Texas, US||2%||≈$5.8 billion|
|IBM Cloud||New York, US||3%||≈$22 billion|
|Alibaba Cloud||Yu Hang District, China||4%||≈$12 billion|
|Salesforce Cloud||California, US||3%||≈$33.07 billion|
|Rackspace||Texas, US||0.96%||≈$3.1 billion|
|Digital Ocean||New York, US||1.55%||≈$650 million|
|OVHCloud||Roubaix, France||<1%||≈$220 million|
Amazon Web Services (AWS)
With a 32% market share, Amazon Web Services (AWS) is the world’s leading cloud service provider in 2023.
AWS offers a comprehensive suite of on-demand computing resources and gives users access to computing power, storage, and databases. The core services include Amazon EC2 for virtual servers, S3 for scalable object storage, and RDS for managed databases.
Amazon provides a global network of data centers, ensuring low-latency access to resources worldwide. Users can deploy applications, run workloads, and store data securely, paying only for the resources they consume.
What’s more, AWS supports private cloud, hybrid cloud, and multi-cloud computing. But it’s most recognizable for its scalable public cloud features.
📊 AWS holds 32% of cloud providers’ market share and has annual revenue of just over $80 billion.
Even though it came out years after AWS and Google Cloud, Microsoft Azure has established itself as one of the most prominent cloud providers in the market.
Microsoft Azure provides IaaS, PaaS, and SaaS solutions, but its main offering is the hybrid cloud computing applications.
There’s a wide range of features to support both private cloud and public cloud usage and robust on-premise infrastructure that’s easy to integrate.
📊 Microsoft Azure holds 22% of the market share and has an annual revenue of $34 billion.
Google Cloud Platform (GCP)
Just like Microsoft Azure and AWS, Google Cloud Platform provides a full-stack cloud offering, including IaaS, PaaS, and SaaS.
What makes GCP stand out is its focus on advanced artificial intelligence (AI) and machine learning capabilities.
The platform manages large amounts of data points in a variety of formats, which makes it great for data-centric companies that are frequently optimizing their operations.
Companies can also take advantage of Google’s machine-learning tools that make data interpretation (from text to speech data) much more comprehensible.
📊 Google Cloud Platform (GCP) has a market share of 11% and annual revenue of $7.4 billion.
Oracle Cloud was first released in 2016, which makes it one of the “younger” cloud providers available today.
This provider is primarily oriented toward business-primary apps and offers enterprise-level performance solutions with a variety of tools designed to manage key cloud operations.
For businesses that are managing several day-to-day applications, Oracle Cloud is one of the most fitting solutions.
Other features include robust architecture, automatic backup, automatic recovery, a self-driving database, a variety of analytics tools, and sophisticated networking features.
📊 Oracle Cloud’s market share is 2% and it has an annual revenue of $5.8 billion.
IBM Cloud is a full-stack cloud computing services provider and it’s most popular for its security capabilities.
This provider includes a wide range of security solutions and governance capabilities that can easily manage business risks and help the organization avoid active threats to its system.
The security solutions included are IBM Cloud Pak, IBM Security Guardium, and IBM QRadar.
📊 IBM Cloud’s market share is 3% and it has an annual revenue of $22 billion.
Founded in 2009, Alibaba Cloud is China’s biggest cloud provider. Interestingly, it was initially launched as Alibaba’s ecommerce support system but it grew into a computing powerhouse over the years.
From database services and cloud communications to Apsara Stack, Alibaba Cloud offers a wide range of features but it’s best known for its elastic computing storage options and Internet of Things (IoT).
Both bigger and smaller enterprises can use Alibaba Cloud to manage their day-to-day operations.
📊 Alibaba Cloud’s market share is 4% and it has an annual revenue of $12 billion.
Salesforce Cloud is a leading cloud service provider known for its customer relationship management (CRM) platform.
Salesforce’s cloud solutions leverage cloud computing to provide scalable, on-demand access to applications and resources.
Built on a multi-tenant architecture, Salesforce offers a range of cloud services, including Sales Cloud for sales automation, Service Cloud for customer service, and Marketing Cloud for marketing automation.
📊 Salesforce Cloud’s market share is 3%.
Rackspace is one of the pioneers in the cloud computing space and it’s still a trusted provider for hundreds of businesses around the world.
The main selling point of Rackspace is its managed cloud services, which include database and infrastructure management alongside robust security protocols.
For businesses that don’t have enough time (or expertise) to manage their cloud computing, Rackspace could be an ideal option as each client gets a dedicated account team and tailor-made services.
📊 Rackspace has a 0.96% market share and annual revenue of $3.1 billion.
DigitalOcean is a cloud service provider that primarily focuses on helping startups and small businesses manage their cloud infrastructure.
Compared to other providers, DigitalOcean stands out with an easy-to-use interface that makes for seamless onboarding for small team businesses that don’t have a lot of IT expertise.
What’s more, the provider also features a cutting-edge infrastructure, supports a variety of programming languages, includes a robust API, and provides developer resources.
📊 DigitalOcean has a 1.55% market share and annual revenue of $650 million.
OVHCloud is one of the more affordable cloud service providers and its main target customer base is European organizations.
They offer features such as metal servers, private cloud hosting, public cloud hosting, web hosting packages, a variety of data centers, and scalable infrastructure.
The biggest disadvantage of OVHCloud is its limited global presence and potential dormancy issues for companies outside of Europe.
📊 OVHCloud has less than 1% market share and an annual revenue of $220 million.
Future of Cloud Computing
So, what’s next in store for cloud computing?
According to Market.us, the global cloud computing market will exceed $2.32 billion by 2032 with a CAGR of 16%. The report states the growth might even be bigger as remote work trends continue to advance with each year.
And guess what is expected to be the main growth engine – machine learning and artificial intelligence (AI). These two are forecasted to play a pivotal role in future cloud expansion.
What’s more, while major players like AWS, Azure, and GCP continue to dominate the market, other industry competitors are making some noticeable improvements each quarter.
As far as challenges go, the main concerns at the moment revolve around data security and privacy.
What do you think the future of cloud computing looks like? What advances do you expect in the following years?
Cloud computing allows users to access and use computing resources (like servers, storage, databases, and networking) over the internet, eliminating the need for physical infrastructure.
With it, Users can store and process data, run applications, and deploy services remotely.
The four main types of cloud computing systems are Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), and Function as a Service (FaaS).
IaaS provides virtualized computing resources, PaaS offers a platform for developing and deploying applications, SaaS delivers software applications over the internet, and FaaS allows developers to execute individual functions or tasks in a serverless environment.
Yes, cloud computing is perfectly safe when implemented with proper security measures.
That’s why reputable cloud service providers invest heavily in security infrastructure, including encryption, access controls, and monitoring.
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