Amazon's Biggest Cloud Competitors Are Mostly Stealing Market Share From Smaller Companies

Amazon's (NASDAQ: AMZN) cloud computing business, Amazon Web Services, has been a massive source of profits for the online retail giant. The cloud business generated over 60% of Amazon's operating income through the first nine months of 2019. That number could grow higher in 2020 as Amazon increases its investments in Prime shipping benefits.

But Amazon has seen some big-name competitors increase their presence in the enterprise cloud computing market over the last half-decade or so, namely Microsoft (NASDAQ: MSFT), Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, and Alibaba. All three have grown their cloud businesses at a faster rate than Amazon in recent years.

Indeed, Amazon's losing some of its market share in cloud computing, as an article from the Wall Street Journal points out. Where it had 53.7% of the market in 2016, it only had 47.8% of the market in 2018, according to data from Gartner. But smaller companies are feeling much more pain. The combined market share of competitors outside of the top five fell from over 50% in 2015 (the year before Amazon's market share peaked) to less than half of that in 2018.

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Source Fool.com