Top 11 Cloud Companies Versus IDC and Gartner estimated market sizes
The purpose of the table below is to estimate very roughly how much business in terms of revenues the cloud companies collect today. Then I compared these numbers to much publicized IDC $56B per year and Gartner $146B per year. Assumptions:
- I included top 10 2009 companies, top 15 2010 both from Network World
- I added new names suggested by contributors to Google cloud computing discussion group (over 40,000 readers)
- I added the company names suggested as comments to my previous blog entry
- I divided the revenues as "Licenses sales and Services", "Hardware Sales" considered for Oracle only and advertising income, which is key
- My research for revenues is minimal and I used these simplifications
- Any cloud company that does not disclose revenues, gets $10M per year default assumption. This is generous for many start-ups, usually struggling with the first millions,and could be an underestimate for some other companies. Overall the number is adequate
- Google advertising data is from published data
- Oracle cloud income come from their estimated business on Amazon. and "cloud-in-box" future sales
- The table does not list other hardware vendors, who also supply cloud service companies: Dell, HP, IBM
- The table does not include Hadoop and analytics companies, as promising startups, like Cloudera are struggling to find a business model. If we include Cloudera and assign a default $10M in revenues, it will make no difference in final conclusion
- The 29 companies listed had revenues in Licenses ad Services just over $10B per year.That is barely 19% of the total market estimate of IDC ($56B per year). As most cloud companies are software and services, the current market size could be, say $15B , but not$ 56B !!!
- The discrepancy may be that IDC counted the hardware sold by Dell, IBM, HP, Sun (now Oracle) as part of the cloud market. Thus is a fuzzy assumption, as one does not know for sure, whether the 1,500 boxes Sales Force bought are the part of the cloud market, just 10,000 more servers were sold to other enterprises where we may guess will be used for clouds
- The definition of "cloud-in-a-box" will make easier to include the hardware as part of the cloud market
- The advertising revenues in cloud market size is 3x larger than software and services revenues
- In terms of revenues, Google and Yahoo pocket three quarters of the entire cloud revenues, almost exclusively through advertising and marketing services
- 11 companies in the next bullet capture almost 100% of the total revenues.
-
- YAHOO
- Salesforce.com
- Microsoft
- Oracle
- Amazon
- SAVVIS
- GoGrid
- NetSuite
- Rackspace
- RightScale
All the other 18 companies share a meager 0.5% of the market :-(
Not much left over from cloud sw and service market ? The take away is this: we usually call any company providing software and service for cloud industry. This market is still very small and it is 10% of the total Gartner number including marketing services and add revenues. (Assumed $15B versus $146B per year)For all practical purposes, the cloud market for software and services is $15B maximum. This is realistic. This is what we should plan before. Don't base your business plan on market share, but on named customers, say 20, that you know for sure will buy from you once you have the product readyAs earliest cloud adopters, Google and Yahoo cleaned the bulk of the revenues that go into their pockets comfortably
| Revenues (US$ millions per year) | |||||||||
| Company | Lic & Services | Hw | Adds | Total | % Total | Cum. | |||
| 762 | 23,000 | 23,762 | 59% | 59% | |||||
| YAHOO | 100 | 6,000 | 6,100 | 15% | 74% | ||||
| Salesforce.com | 5,000 | 5,000 | 12% | 86% | |||||
| Microsoft | 2,000 | 2,000 | 5% | 91% | |||||
| Oracle | 800 | 1,000 | 1,800 | 4% | 96% | ||||
| Amazon | 600 | 600 | 1% | 97% | |||||
| SAVVIS | 300 | 300 | 1% | 98% | |||||
| GoGrid | 250 | 250 | 1% | 99% | |||||
| NetSuite | 200 | 200 | 0% | 99% | |||||
| Rackspace | 100 | 100 | 0% | 99% | |||||
| RightScale | 100 | 100 | 0% | 100% | |||||
| Enomaly | 10 | 10 | 0% | 100% | |||||
| Abiquo | 10 | 10 | 0% | 100% | |||||
| Boom! | 10 | 10 | 0% | 100% | |||||
| Cloudshare | 10 | 10 | 0% | 100% | |||||
| Crosscheck Networks | 10 | 10 | 0% | 100% | |||||
| Elastra | 10 | 10 | 0% | 100% | |||||
| Egnyte | 10 | 10 | 0% | 100% | |||||
| Good Data | 10 | 10 | 0% | 100% | |||||
| Kaevo | 10 | 10 | 0% | 100% | |||||
| Nasuni | 10 | 10 | 0% | 100% | |||||
| Navajo Systems | 10 | 10 | 0% | 100% | |||||
| Symplified | 10 | 10 | 0% | 100% | |||||
| Terremark Worldwide | 10 | 10 | 0% | 100% | |||||
| Viewfinity | 10 | 10 | 0% | 100% | |||||
| Virtual Ark | 10 | 10 | 0% | 100% | |||||
| VMlogix | 10 | 10 | 0% | 100% | |||||
| CloudSwitch | 10 | 10 | 0% | 100% | |||||
| Greenqloud | 0 | 0 | 0% | 100% | |||||
| T O T A L | 10,382 | 1,000 | 29,000 | 40,382 | |||||
| Market Estimate, no advertising IDC | 56,000 | ||||||||
| Market Estimate with Advertising, Gartner | 146,000 | ||||||||
| % | 19% | 28% | |||||||
Comments
The reality is that public cloud is the worst nightmare for the big enterprise vendors, since it logically leads to not needing an ITops department (or a CIO), so they would have no-one to sell to except the public cloud providers, who don't need them.
IMHO the end game is that enterprise vendors need to clone AWS, sell it for less and run it better than Amazon to be relevant. So far I don't see that happening. They are doing all the wrong things for the right reasons, listening to their customers and going after the big profits, when the future belongs to people who will never be their customers. Reread the first few pages of The Innovators Dilemma...
Quoting Umair Haque in Betterness Manifesto:
"Betterness can't happen if you're spending your life churning out toxic junk. It can only happen when more meaningful work is done. Find a company that's better. Better yet, start one. No, it's not easy. But here's the thing: over the next decade, the businesses that can't do better, the ones you're giving your talent away to, are to go extinct anyway. Cut the cord now, before the axe falls and cuts it for you."
Amazon, Netflix, Google are considered a new breed of companies, the type of companies we should all work for. System Houses line IBM, HP and Oracle seems to look more and more alike each day. So you are right. They need a transformation to survive
Yet, the hardware companies have a great chance to be winners on the cloud msarkets. I predicted this - as opinion - in May 2009 see http://bit.ly/bBTdXe .
Gartner says that now IT departments have more money put aside for cloud computing. But what is cloud computing? The Oracle offer for the "cloud-in-box" is the closest thing to buying a sort of mainframe and call it a cloud. It is simple and it can be handled by the classic data center sales force.
Amazon is a more elegant solution, but it requires inter mediation of 3rd party consultants.
A transformational merger of an Amazon EC2 service with a system hardware company that can place a seeding cloud in the box in each account, to expand later to Amazon.com, this wil be the real leader., IMHO.
When this will happen, the "push-type" companies that make us unhappy today, will become pull companies. This means people will be attracted in an ecosystem of employees, partners, customers and community.
IMHO, Amazon needs to make some key acquisitions to assure greater clout and change the way we do IT in the world. For example, here are some wild speculations: What if Google acquires Amazon and makes Jeff Bezos co-CEO? What if Amazon acquires Dell, a move Dell may consider to compete against IBM and HP and Oracle? Dell style of selling on line, a big novelty 10 years ago, is no longer a competitive advantage. In fact Amazon can completely re-vitalize Dell web sales, if combines hardware sales with compute cycles sales.
2 cents