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IaaS and PaaS Revenues Growing at 65% per Year

RENO, NV -- (Marketwire) -- 12/11/12 -- New data from Synergy Research Group shows that service provider revenues from IaaS and PaaS topped $2.75 billion in the first half of the year, having grown by 65% from the same period last year. It is particularly noteworthy that IaaS and PaaS share of the total infrastructure market has grown from 6% in late 2010 to 12% currently (the total market comprising managed hosting, colocation, CDN/ADN, IaaS and PaaS). There is enormous potential for future IaaS growth as the managed hosting services market migrates to cloud-based service offerings.

Amazon continues to be a clear leader in IaaS with a 34% share of the worldwide market; it is also second ranked in PaaS behind salesforce.com, which accounts for 21% of the worldwide market. Meanwhile, managed hosting and colocation are very fragmented markets with a multitude of service providers. Rackspace maintains a narrow lead in managed hosting, followed closely by a slew of traditional telcos and IT service providers -- none of which has more than a 5% market share. The chasing group includes Verizon, NTT, British Telecom, IBM, France Telecom-Orange, SingTel and China Telecom. Equinix is the clear leader in colocation with an 11% market share, but it too is followed by a long list of telcos, IT service providers and colocation specialists. Akamai and Level 3 lead the charge in CDN/ADN, together accounting for 44% of the total market.

"We are in the early days of a profound shift in the data center market towards cloud infrastructure services, which presents extremely exciting growth opportunities for emerging cloud providers and traditional service providers the world over," says Jeremy Duke, Synergy Research Group's founder and Chief Analyst. "Amazon has clearly demonstrated first mover advantage and built a strong cloud provider position, driving the IaaS market and lighting a fire under traditional telcos which are seeking to play catch up, often via M&A and partnership activity."

About Synergy's Cloud Infrastructure Service research

Synergy's Cloud Infrastructure Services research provides quarterly market sizing and segmentation data, including operator revenues by segment and by region. Data is provided via Synergy's uniquely flexible SIA database which enables rapid analysis and provides a range of graphic data presentation options. The research covers IaaS, PaaS, managed hosting, colocation and CDN/ADN.

About Synergy Research Group

Synergy Research Group (www.srgresearch.com), a strategic partner of TeleGeography (www.telegeography.com), provides market intelligence, analytics, and strategic consulting services to the networking and telecom industries. Synergy Research Group delivers quarterly data covering Cloud Services, Video Infrastructure, UC Applications, Enterprise Voice, Data Center, Mobile Internet Infrastructure, Videoconferencing & TelePresence, Network Security, Cloud Communication & Collaboration, Content Delivery Networks, Routers, Ethernet Switching, Service Provider VoIP, SAN, WLANs, and emerging communication technologies.

To speak to an analyst or for more information on receiving a copy of this report, please contact Heather Gallo @ hgallo@srgresearch.com or at 775-852-3330 ext 101.

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