AWS #1 Enterprise Storage Vendor by Revenue

By Frankie Berry, analyst and managing partner, IT Brand Pulse, Inc.

AWS Leapfrogs Traditional Vendors to Become #1 in Enterprise Storage

In 2018, IT Brand Pulse observed that no one published estimates of how much revenue the cloud service providers derive from storage, and where that places them in the rankings of storage leaders.

This inspired us to publish a LinkedIn article connecting various sources of data to conclude AWS was the #3 enterprise storage vendor in 2017 and on a trajectory to become #1 by 2020.

The following is our updated estimates for AWS’s ranking on the enterprise storage leaderboard in 2020. The bottom line is our research shows our prediction came true and AWS became the #1 enterprise storage vendor by revenue.

Read on to see how we calculated our results.

AWS Growth Zooms Past Sluggish Traditional Storage Leaders
Below is a ranking of enterprise external OEM storage systems that IDC publishes quarterly. These are the storage systems you find in every data center and are being displaced a little every year by Storage-as-as-Service (STaaS). Aside from a few quarters where the traditional storage leaders enjoyed spurts of Y/Y growth, their trajectory has been flat to down.

Enterprise Storage Leaderboard – 3Q20
 

Cloud System Infrastructure Services (IaaS) Revenue is Booming
We then searched for data about cloud services revenue. Fortunately, market leading cloud service provider AWS publishes their revenue quarterly.

IT Brand Pulse estimates that 15% and 20% of overall Infrastructure-as-a-Service (IaaS) revenue reported by AWS is Storage-as-a-Service (STaaS) revenue. Below are the AWS revenue numbers for 3Q20 published by Amazon. It shows that AWS STaaS revenue in 3Q20, at 15% and 20% of overall revenue, is between $1.74 billion – $2.32 billion.

AWS STaaS Revenue Estimated $1.74 billion – $2.32 billion in 3Q20

Microsoft #2 IaaS and STaaS Vendor
In October 2020, Synergy Research published worldwide cloud provider market share for Q3 2020, which we will use to extrapolate STaaS market share. Amazon and Microsoft make up over half of the market at 33% and 18% respectively.

According to Synergy, “Amazon market share remaining at its long-standing mark of around 33%, while Microsoft’s share was over 18%.”

Based on our estimates that STaaS revenue is 15% to 20% of overall IaaS revenue, and Synergy’s estimate that Microsoft revenue is 54.5% of AWS revenue, Microsoft STaaS revenue in Q3 2020 is then between $940 million – $1.26 billion in 3Q20.

AWS Takes #1 in Market Share, Azure Closing in on #2 Spot
Below we inserted the estimated AWS and Microsoft Q3 storage revenue into the IDC storage rankings shown above to show that AWS is now #1 in enterprise storage revenue. Azure has risen to the #3 spot and with revenue growth at 59%, we expect as soon as 4Q20, Microsoft will overtake Dell Technologies for the #2 spot.

Enterprise Server, Storage, and Networking Leadership will be Dominated by Cloud Service Providers
In this article, we only compared estimates for AWS and Azure STaaS revenue. If we added estimates for Google, Alibaba, and other major cloud service providers, more would appear on the leaderboard. And most likely, cloud service providers are the enterprise server and networking leaders.