Amazon, Microsoft, Google, and Alibaba will hold the lion's share of the cloud market, according to Goldman Sachs analyst Heather Bellini.
She sees massive consolidation in the cloud market with companies that are highly differentiated and can invest a significant amount of money upfront as being on top.
As businesses and individuals migrate their work and personal lives to the cloud, four companies will dominate the cloud platform market, according to Goldman Sachs.
Amazon's Web Services, Microsoft's Azure, Alphabet's Google Cloud platforms and Alibaba will together make up 65% of cloud market share in 2017, Heather Bellini, an analyst at Goldman Sachs, wrote in a note to clients. She sees even more consolidation in the cloud platform business in the future, bringing the collective market share to around 89% by 2019.
Goldman Sachs
"We believe that share will continue to consolidate around the largest platforms into an oligopolistic market structure," Bellini wrote in a note. She believes in a consolidation because the aforementioned companies are able to provide differentiated, value-added services that draw consumers to their platforms, as well as make significant capital investments in the short term.
Amazon's cloud leads the pack in terms of sales, bringing in $15.9 billion, while Microsoft, Google, and Alibaba have brought in $5 billion, $1.9 billion and $1.4 billion, respectively. While Amazon's year-over-year cloud sales growth rate was a respectable 43%, the other big three companies have expanded even more rapidly: Microsoft's sales were up 92% year-over-year, Alibaba's were up 97%, and Google's were up a whopping 158%.
Amazon Web Services has proven to be a cash cow for the company, boosting its financials as the rest of the company runs a deficit.
Amazon's stock is trading at $1,169.27 per share, and is up 54.97% for the year. Microsoft is at $85.85 per share, and is up 37.17%, Alibaba is at $175.32 per share and is up 97.53% over the year, and Google is at $1,051.59 per share and is up 30.31% a year.
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