The top five public cloud providers strengthened their collective hold on the infrastructure-as-a-service (IaaS) market last year as global revenues reached $44.5 billion, according to Gartner.

Amazon, Microsoft, Alibaba, Google, and Tencent captured 80% of global IaaS revenues in 2019 up from 77% in 2018. Overall, the market grew 37.3% last year, Gartner said.

Enterprise spending on public cloud services, fueled by growing interest in edge computing, artificial intelligence, machine learning, and 5G, is poised to grow even more as a result of the COVID-19 crisis, according to Sid Nag, research vice president at Gartner.

“We’re seeing a proliferation of the extension of cloud into edge as we see more and more of the functionality move away to the cloud and to more of these feature-rich endpoints,” he told SDxCentral in a phone interview.

“I also think you’ll be seeing a lot of interest in 5G,” Nag said. “Given that telcos have invested so much capex dollars in building this super highway, the 5G network, they want to start to monetizing it and they don’t have the necessary wherewithal to essentially drive the bits to that highway because the bits are really the applications, and applications are running in the cloud today.”

The nexus of cloud, edge, 5G, and analytics is driving the move to digital and helping CIOs understand the opportunity, he explained. “CIOs are trying to get a handle on how to really leverage these technologies,” and their interest will be driven by specialized use cases that can help CIOs solve business challenges, he added. 

“Cloud underpins the push to digital business, which remains at the top of CIOs’ agenda,” Nag said in a statement. “At the end of the day, each of these technologies require a scalable, elastic, and high-capacity infrastructure platform like public cloud IaaS, which is why the market witnessed strong growth.”

Amazon Web Services (AWS), the long running public cloud market leader, continued to dominate IaaS in 2019 with an estimated $20 billion in revenue and a 45% market share. Microsoft Azure captured a 17.9% market share with $7.95 billion in revenue, more than half of which came from North America, and experienced 57.8% year-over-year growth on IaaS, according to Gartner. 

Alibaba Cloud, the dominant IaaS provider in China, grew 62.4% in 2019 with almost $4.1 billion in revenue and a 9.1% market share in 2019. Google’s IaaS revenue surged 80.1% during 2019 to nearly $2.4 billion with a market share of 5.3%, and Tencent, the fastest growing IaaS provider among the group, experienced a growth rate of 101.5% in 2019 with almost $1.25 billion in revenue and 2.8% market share, based on Gartner’s analysis.

Nag expects China-based vendors to gain a greater share of the IaaS market in the coming year. “As the cloud market matures and its leaders experience natural market share erosion as a result, China-based providers such as Alibaba, Tencent, and Huawei will start to gain more traction. It will also be hard for other providers, such as the North America based cloud providers, to enter the China market given the country’s highly regulated market,” he said in a statement.

The combined group of other public cloud providers, outside of the top five, captured a 19.9% share of the market with nearly $8.86 billion in IaaS revenue in 2019. Collectively, the group of smaller vendors lost a combined 3% share of the market.

The final figures for 2019 set the stage for what’s already been a turbulent 2020 with a global pandemic forcing many enterprises to reconsider and expand transitions to the cloud. “When enterprises were compelled to move their applications to the public cloud as a result of the pandemic, they realized the true benefits of public cloud and it is unlikely that they will change course,” Nag said.

“In the recovery and rebound phase, CIOs are recognizing that they don’t need to bring workloads back on premises, which will further increase cloud spending and drive new applications around cloud-hosted collaboration that incorporate emerging technologies,” he said. 

That will translate to more enterprise deals with more public cloud providers, according to Nag. “The world is moving to multicloud. Most CIOs and IT leaders are saying, ‘You know what, I have a workload. I want to use the best-in-class componentry to service that workload and my primary cloud provider may not have all the best in class,’” he said. “In the past they were all in with one provider, but now we’re seeing more and more proliferation of multicloud adoption models. … Over 80% of organizations have already adopted multicloud or plan to do so by the end of 2020.”

Partnerships between enterprises, public cloud providers, and 5G operators will evolve further in that regard, he said, highlighting the recent spate of 5G edge deals inked by AWS, Microsoft, Google, IBM, and others.