The worldwide IaaS public cloud represents a $45 billion market, led by the largest technology companies. Since the technology's inception, one provider has dominated the market: Amazon Web Services. 

But infrastructure alone is losing its edge, as companies instead look for the services layered on top of storage solutions. 

Still, that does little to slow Amazon's revenue growth. As big as AWS is (earning $20 billion in revenue in 2019) it continues to grow at a steady rate, increasing revenue 29% between 2018 and 2019, according to Gartner's latest data shared with CIO Dive. 

That's slow compared to Microsoft's 58% and Google's 80% year-over-year growth, but Amazon's scale remains untouched. 

Who will "win" the cloud wars is largely set. Amazon remains the largest revenue-generating cloud provider. Competitors will continue to grow and scale as the market matures and more companies place workloads in public cloud infrastructure. 

What's emerging is an integrated market where IaaS and PaaS come together in the cloud infrastructure and platform services (CIPS) segment, Gartner's new cloud category. It includes application, function, database and application developer platform as a service offerings.

It's also a much larger market than IaaS alone. In 2019, CIPS generated $63.4 billion in revenue. In the expanded offerings, Amazon controls half the market, an even larger share then IaaS. 

"Nobody wakes up in the morning and says, 'I want to buy IaaS,'" said Sid Nag, VP analyst, at Gartner. "They're trying to solve a business problem." 

Companies are buying a combination of infrastructure and platform services, choosing a vendor based on their platform capabilities.

The reality of the market is, providers are trying to serve client demand and move customers to the cloud estate, Nag said. Tracking IaaS and PaaS separately is a bit "archaic."

A deeper look at market share

The market share numbers still carry weight. Understanding how much each major cloud provider controls the market indicates bragging rights for the next year and influences what vendors companies select. 

Market share matters because it reflects the amount of talent and institutional knowledge there is to deliver solutions, Forrest Brazeal, senior manager at A Cloud Guru. "What's important here is there is choice." 

While underlying solutions have reached parity, Amazon Web Services still has an outsized market influence, controlling 45% of the IaaS public cloud market, followed by Microsoft with 18% of the market. Alibaba, Google and Tencent round out the top five. 

Year over year, Amazon's market share has slowly eroded, a direct result of other vendors growing and nabbing market share. 

Alibaba and Tencent have the largest presence in China and Southeast Asia but don't have as much of a footprint in North America, Nag said. They're adding to the shared erosion but operate in a protected market major players can't operate in without a partnership strategy.  

It's a similar picture in the CIPS market, where Amazon controls 50% of the 2019 market share, followed by Microsoft with 23%. 

As Microsoft competes with Amazon, they have to continue to push the envelope on SaaS offerings, as pure infrastructure has not traditionally been their strategy, Nag said. Amazon primarily enabled infrastructure to support its e-commerce portal but doesn't have a very strong SaaS strategy other than marketplace offerings. 

Microsoft is the No. 1 SaaS provider, and they're getting IaaS business from those customers but there's room to grow, Nag said. 

Combining IaaS and PaaS

The combination of IaaS and PaaS highlights changes in technology resource consumption. 

"There is a noticeable shift toward moving up the stack in terms of offloading some of the managed services elements" to cloud service providers, said Stephanie Radlick, management consultant at Pace Harmon. 

It comes with an appreciation of value, Radlick said. Businesses can now shift more of the undifferentiated workloads to cloud providers, allowing IT organizations to deliver as much value to the business as possible. 

It also creates more access to technology businesses previously would have had to build in house, such as using PaaS to access artificial intelligence and machine learning capabilities. 

Companies have access to configurable off-the-shelf offerings that 10 years ago they would have had to pay data scientists to build in house, Radlick said.

Organizations have pivoted how they approach cloud technology, capitalizing on the services layered on top of IaaS. 

Some of these conversations stem from the serverless space, Brazeal said. Businesses don't go to the cloud because they want a different place to run services. Instead, they look toward the benefits of managed services, with capabilities around AI, data and reporting, among others. 

With that, each company will choose a vendor's specialization they want to capitalize on that fits well into their technology portfolio. 

AWS continues to have market momentum because of the flywheel effect; it has the largest amount of services, adoption and market penetration, Brazeal said. That yields more talent to work with AWS-based workloads. 

Organizations might choose other providers because of features, such as Google Cloud's achievements with natural language process and data warehousing capabilities with BigQuery.

Companies can also adopt best-of-breed solutions, cherry picking which services and cloud providers to layer into the corporate technology stack, following a hybrid or multicloud model. And if a company is enterprise scale, thanks to acquisitions and lack of cross-department technology consistency, many organizations will already use a multicloud model. 

As businesses moves to the cloud, decision making is influenced by the potential discounts a company can receive by working with a single vendor, Radlick said. Or if a company already predominantly uses one service provider, when migrating to the cloud they might adopt infrastructure capabilities from the same provider.