“It is rare to have a digital market that is so concentrated“. The latest report from Markess of Exaegis, a company that specializes in analyzing digital markets including the cloud, quickly set the tone: the dominance of three American giants Amazon Web Services (AWS), Microsoft Azure and Google Cloud has never been so strong in France, and there is no indication that this concentration could go down.
In 2021, the three hyperscalers – the leading cloud providers – have won in everything: not only do their market shares remain at their highest at 71%, but they are also the ones who benefit the most from market growth, as they get nothing . less than 80% of them between them, that is almost 400 million euros in new contracts a year! All this, of course, at the expense of alternative solutions, which are trying to exist in niches in the market but apparently not yet able to change the established order.
Captures AWS, Microsoft Azure and Google Cloud -almost- all
In detail, the study covers the cloud infrastructure (IaaS) market and the development-on-demand (PaaS) applications market. Although its growth has been slower than its competitors Microsoft Azure and Google Cloud, Amazon Web Services continues to dominate head and shoulders, with a large market share estimated at 46%, and growth of 23 % in 2021.. “With an innovative and versatile offer, AWS is now present in all strata of the French economy, from SMEs to massive accounts, including publishers and startups.“, says the study.
With 17% market share, the number two Microsoft Azure remains very far from the leader. But the Redmond publisher saw the best growth of all: +53% in 2021.Microsoft is taking advantage of its massive investment in Azure and synergies with its software offerings (Office 365, CRM, ERP, Analytics, etc.)“, explains the note. Finally, the third hyperscaler on the podium with 8% market share, Google Cloud is clearly behind the first two in terms of adoption, but it is starting to catch up with them at 48% growth in 2021.
What about other suppliers? If 71% of the market is concentrated in the hands of three players, everyone else shares the remaining 29%. In other words, French OVHCloud, Scaleway, Clever Cloud, Orange Business Services and 3D Oustcale, or the Americans Kyndred – IBM Global Technology Services ’new name – have recovered from the crumbs. Worse, their growth is weaker: 23%, while the market will grow 35% in 2021. In other words, alternatives to the three American giants tend to decline.
“For the most part, these players cannot compete with the large investments of hyperscalers, which are estimated at billions of dollars annually, and focus on specific segments (cybersecurity, application platform, sovereign cloud or even hybrid and multicloud cloud management)“.
Alternatives failed to take advantage of the growth momentum
There is no indication that this balance of power in favor of Gafam will change in the coming months and years. Despite their rhetoric about the need for digital sovereignty in the cloud, France and the European Union seem to have resigned to the American steamroller, as shown by France’s new approach to the cloud where Gafam is at the center, or the European Gaia-X project. , which builds future market standards with them. So, in France, the three giants went on to build large contracts in 2021, as SNCF chose to move all of its servers, previously managed internally, to the AWS cloud.
However, the cloud infrastructure market is in a very strong growth dynamic, around 37% per year according to the company. In other words, today’s champions may not be the dominant ones in ten years if this growth is primarily to benefit alternative players. It will still require them to be further supported by public policies … The current IaaS and PaaS market is estimated at 16 billion euros in 2021, and should reach 25 billion euros by 2025 If Gafam continues to be swallowed by 80% of the sector’s growth, 7.2 billion euros from the additional 9 billion euros planned in 2025 will go into their pockets.
Aware of the risk that the extraordinary growth of the sector is not in their favor, the Gafams do not rub against lobbying and investment to maintain their positions and compete with each other. Thus, AWS hopes to counter the somewhat troubling rise of Microsoft Azure, by investing $ 25 billion in its cloud infrastructure services by mid-2023. The perception of the efficiency of the technologies remains firmly rooted in France. and Gafam catalog.
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