AWS #3 StorageVendor in 2017 | #1 in 2020
Industry Brief

There's a lot of data published every day about the revenue and growth rate of the
enterprise storage vendors, and about the overall growth rate for public cloud
Infrastructure-as-as-Service (Iaas) providers. But to the best of our knowledge, no one
has published estimates of how much revenue the cloud service providers derive from
storage, and where that places them in the rankings of storage leaders.
IT Brand Pulse thought it would be interesting, and relevant to storage industry
watchers, to know how far the cloud service providers have climbed in the rankings, so
we crowd-sourced the data needed to do the job.The bottom line is that we estimate
AWS is the #3 enterprise storage vendor by revenue today, and will be #1 in 2020.
Read on to see how we calculated our results.

Data from IDC defines
the rankings of storage "system"
leaders.These are the storage
systems you find in every data
center that are being displaced a
little every year by Storage-as-as-
Service (STaaS). As you can see,
revenue for the traditional storage
leaders is not growing while the
ODMs are growing rapidly--
mostly because they're supplying
storage systems to the hyperscale
cloud STaaS suppliers.
Top 5VendorGroups,WorldwideTotal Enterprise Storage Systems Market,
4Q2017 (US$ millions)
Company
4Q17
Revenue
4Q17
Market
Share
4Q16
Revenue
4Q16
Market
Share
4Q17/4Q16
Growth
T1 - HPE/ H3C $2,565.3 18.9% $2,492.3 20.9% 2.9%
T1 - Dell Inc. $2,434.7 18.0% $2,749.0 23.1% -11.4%
T3 - IBM $744.6 5.5% $685.6 5.8% 8.6%
T3 - NetApp $735.3 5.4% $642.0 5.4% 14.5%
T5 - Huawei $517.7 3.8% $401.8 3.4% 28.9%
T5 - Hitachi $453.1 3.3% $462.8 3.9% -2.1%
ODM Direct $2,764.3 20.4% $2,058.9 17.3% 34.3%
Others $3,341.2 24.6% $2,429.7 20.4% 37.5%
AllVendors $13,556.1 100.0% $11,922.2 100.0% 13.7%

We then searched for data
about Cloud Services Revenue.
According to Gartner, cloud
services revenue is booming with
the highest growth rate in the
IaaS sector.We still need to
determine the size of the STaaS
market, which is a subset of these
IaaS projections, but this Gartner
forecast defined a 2016-2020
growth rate that we can use for
STaaS.
Worldwide Public Cloud Services
Revenue Forecast (Billions of U.S.
Dollars)
2016 2017 2018 2019 2020
Cloud Advertising 90.3 104.5 118.5 133.6 151.1
Cloud Application Services (SaaS) 48.2 58.6 71.2 84.8 99.7
Cloud Business Process Services
(BPaaS)
39.6 42.2 45.8 49.5 53.6
Cloud System Infrastructure
Services (IaaS)
25.4 34.7 45.8 58.4 72.4
Cloud Application Infrastructure
Services (PaaS)
9.0 11.4 14.2 17.3 20.8
Cloud Management and Security
Services
7.1 8.7 10.3 12.0 13.9
Total Market 219.6 260.2 305.8 355.6 411.4

23%
18%
16%
14%
13%
11%
6%
0%
5%
10%
15%
20%
25%
IaaS PaaS SaaS Mgt &
Security
Total
Market
Advertising BPaaS
Compound Annual Growth Rate by Cloud Service Category, 2016-202o
Source:Gartner Public Cloud Services Revenue Forecast,October 2017

In August of 2018 Gartner
published rankings for
overall IaaS
revenue market share
which we used to
extrapolate STaaS market
share. According to
Gartner, AWS owns over
half the IaaS market, and
we believe it is reasonable
to assume AWS has similar
market share for STaaS.
51%
13%
5% 3%
2%
25%
0%
10%
20%
30%
40%
50%
60%
Amazon Microsoft Alibaba Google IBM Others
MarketShare

IT Brand Pulse estimates that AWS storage revenue is between 15 and 20%
of overall revenue. Below are actual AWS revenue numbers published by
Amazon along with numbers for AWS storage revenue at 15% of overall
revenue and 20% of overall revenue. Based on the revenue reported by
Amazon for Q2 2018 and our estimates, AWS storage revenue was between
$900 million and $1.2 billion in Q2.That is an annual storage run-rate of $3.6
to $4.8 billion.

Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
AWS Revenue $1,050 $1,005 $1,169 $1,420 $1,566 $1,824 $2,085 $2,405 $2,566 $2,866 $3,231 $3,536 $3,661 $4,100 $4,584 $5,113 $5,442 $6,110
STaaS @15% $158 $151 $175 $213 $235 $274 $313 $361 $385 $430 $485 $530 $549 $615 $688 $767 $816 $917
STaaS @20% $210 $201 $234 $284 $313 $365 $417 $481 $513 $573 $646 $707 $732 $820 $917 $1,023 $1,088 $1,222
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
Millions

$1,222
$319
$110 $79 $45
$599
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
Amazon Microsoft Alibaba Google IBM Others
MarketShare
Source: Gartner, Worldwide IaaS Public Cloud Services Market Share, and IT Brand Pulse
Combine the Gartner market share estimates
for overall IaaS and our estimate that up to 20%
of the overall revenue comes from storage, and
you get the following chart showing STaaS
revenue and rankings for Q2 18.

Put the annual storage run-rate of $3.6 to $4.8 billion into the IDC storage
rankings we looked at earlier and "Voila!" you see that AWS is today a solid
#3 in enterprise storage revenue.The gaudy AWS growth rate stands out
and provides a strong hint that we should not expect AWS to stay at #3 for
long.

Top 5 Vendor Groups, Worldwide Total Enterprise Storage Systems Market, 4Q2017 (US$ millions)
Company
4Q17
Revenue
4Q17
Market Share
4Q16
Revenue
4Q16
Market Share
4Q17/4Q16
Growth
T1 - HPE/New H3C $2,565.30 17.36% $2,492.30 19.56% 2.90%
T1 - Dell Inc. $2,434.70 16.47% $2,749.00 21.57% -11.40%
3 AWS @ 20% of Rev $1,222 8.27% $820 6.44% 49.00%
T4 – IBM $744.60 5.04% $685.60 5.38% 8.60%
T4 – NetApp $735.30 4.98% $642.00 5.04% 14.50%
T6 – Huawei $517.70 3.50% $401.80 3.15% 28.90%
T6 - Hitachi $453.10 3.07% $462.80 3.63% -2.10%
ODM Direct $2,764.30 18.71% $2,058.90 16.16% 34.30%
Others $3,341.20 22.61% $2,429.70 19.07% 37.50%
AllVendors $14,778.20 100.00% $12,742.10 100.00% 15.90%
Source: IDCWorldwideQuarterly Enterprise Storage SystemsTracker, March 1, 2018 and IT Brand Pulse

69%
43% 43%
47%
49%
81%
78%
69%
64%
58%
55%
47%
43%
42% 42%
44%
48% 49%
Q1 14 Q2 14 Q3 14 Q4 14 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18
AWS raced to a third place
rankings by riding the massive
IaaS wave the last several years.
We searched for ways to
validate the Gartner growth
trajectory, and found data about
their history of growth and
about their investment in R&D.
While not growing at 80% per
year anymore, AWS is seeing an
upswing in their growth rate the
last several quarters. This gives
us confidence we can count on
another year or two of over 40%
per year growth.
Upswing in Growth

https://www.bloomberg.com/view/articles/2018-04-05/amazon-s-technology-and-content-spending-a-huge-gift-to-economy
10.2
10.6
11.5
12.1
13.1
13.9
14.8
14.9
16.6
22.6
0 5 10 15 20 25
Merck
Johnson & Johnson
Roche
Apple
Intel
Microsoft
Volkswagen
Samsung
Alphabet
Amazon
$Billions Spent on R&D
If R&D investment is the
key to sustaining over 40%
per year growth, then you
can bet the farm because
no one, I mean no one,
invests more in R&D than
Amazon.According
to Bloomberg, Amazon
spent over $22 billion on
R&D in 2017, 36% more
than Google, and 62%
more than Microsoft.

Q4 2017 YoY Q4 2018 YoY Q4 2019 YoY Q4 2020
HPE $2,565 2.90% $2,640 2.90% $2,716 2.90% $2,795
Dell
EMC
$2,435 -11.40% $2,157 0% $2,157 0% $2,157
AWS $1,222 48.00% $1,809 48.00% $2,677 48.00% $3,962
AWS $1,222 48.00% $1,809 40.00% $2,533 40.00% $3,546
AWS $1,222 48.00% $1,809 30.00% $2,378 30.00% $3,091
Trajectory with DifferentYear overYear Growth Rates
In the model below, we estimated that
the growth rate for HPE storage would
be the same as Q4 2017, Dell EMC
would see zero growth, and AWS would
enjoy from 30% to 48% annual growth.
Even if AWS growth decelerates to 30%
per year, the company will emerge as
the #1 enterprise storage vendor in
2020. It is more likely that AWS will race
past the pack in 2020 while sustaining
well over 40% growth and driving over
$15 billion in annual storage revenue.

Your Feedback is Appreciated
If you have information that can make these estimates more
accurate, we welcome your feedback and will publish updates
if we get data that significantly changes this analysis.
frank.berry@itbrandpulse.com