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IaaS and PaaS Service Provider Revenue Top $2.75B in First Half of Year

December 11, 2012

Service provider revenue from Infrastructure-as-a-Service (IaaS) and Platform-as-a-Service (PaaS) was more than $2.75 billion in the first half of this year, according to new data from Synergy (News - Alert) Research Group. The company showed revenue had grown by 65 percent from the same period last year, indicating enormous potential for these types of services as the managed hosting services market evolves.

As the managed services market migrates to largely cloud-based service offerings, the Iaas and PaaS share of the total infrastructure market has risen. According to Synergy, its share of the market has grown from 6 percent in late 2010 to a current 12 percent, which represents the total market including managed hosting, colocation, CDN/ADN, IaaS and PaaS.

Synergy also found that Amazon is the leader in IaaS, dominating the market with a 34 percent worldwide share, and coming in second in the PaaS market behind salesforce.com. Salesforce represents 21 percent of the PaaS market.

The research also found that the managed hosting and colocation markets are fragmented, with a multitude of service providers.

Rackspace (News - Alert) is narrowly at the forefront of the managed hosting space along with traditional telcos and IT service providers, with none having more than a five percent market share. Other players in that space include Verizon, NTT (News - Alert), British Telecom, IBM, France Telecom-Orange, SingTel and China Telecom.

Equinix leads the way in the colocation space with an 11 percent market share, followed by a large number of telcos, IT service providers and colocation specialists. Akamai (News - Alert) and Level3 are the front of the CDN/ADN space, representing 44 percent of total market share.

Synergy's research covers IaaS, PaaS, managed hosting, colocation and CDN/ADN, with data provided by the company's flexible SIA database. This enables rapid analysis of data while offering a range of graphic data prevention options.

Synergy Cloud Infrastructure Services research offers quarterly market sizing and segmentation data, with operator revenue represented by segment and region.

"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," said 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."

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Edited by Braden Becker

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