Updated IT Brand Pulse estimates for AWS's ranking on the enterprise storage leaderboard in 2018.

1. AWS #3 StorageVendor in 2018 | #1 in 2020
Industry Brief

2. 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.

3. 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). After years of
slow growth, some traditional
storage leaders enjoyed healthy
growth in Q4 2018.
Top 5 Companies,WorldwideTotal Enterprise Storage Systems Market, Fourth
Quarter of 2018 (Revenues are in US$ millions)
Company
4Q18
Revenue
4Q18
Market
Share
4Q17
Revenue
4Q17 Market
Share
4Q18/4Q17
Revenue
Growth
1. Dell Inc. $2,987.6 20.6% $2,603.1 19.3% 14.8%
2. HPE/H3C $2,606.3 18.0% $2,592.0 19.2% 0.6%
T3. NetApp $842.3 5.8% $735.3 5.4% 14.6%
T3. IBM $698.5 4.8% $746.9 5.5% -6.5%
T5. Huawei $579.7 4.0% $514.6 3.8% 12.6%
T5. Lenovo $501.8 3.5% $306.1 2.3% 63.9%
T5. Hitachi $483.6 3.3% $453.1 3.4% 6.7%
ODM Direct $2,722.8 18.8% $2,764.3 20.5% -1.5%
Rest of Market $3,072.9 21.2% $2,782.2 20.6% 10.4%
Total $14,495.5 100.0% $13,497.7 100.0% 7.4%
Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, March 7, 2019.

4. 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 ($B)
2017 2018 2019 2020 2021
Cloud Business Process Services
(BPaaS)
42.2 46.6 50.3 54.1 58.1
Cloud Application Infrastructure
Services (PaaS)
11.9 15.2 18.8 23.0 27.7
Cloud Application Services (SaaS) 58.8 72.2 85.1 98.9 113.1
Cloud Management and Security
Services
8.7 10.7 12.5 14.4 16.3
Cloud System Infrastructure
Services (IaaS)
23.6 31.0 39.5 49.9 63.0
Total Market 145.3 175.8 206.2 240.3 278.3
https://www.gartner.com/en/newsroom/press-releases/2018-08-01-gartner-says-worldwide-iaas-public-cloud-services-market-grew-30-percent-in-2017

5. 28%
24%
18% 17%
13%
8%
0%
5%
10%
15%
20%
25%
30%
IaaS PaaS SaaS Mgt &
Security
Total
Market
BPaaS
Compound Annual Growth Rate by Cloud Service Category, 2017-2021
https://www.gartner.com/en/newsroom/press-releases/2018-08-01-gartner-says-worldwide-iaas-public-cloud-services-market-grew-30-percent-in-2017

6. In late 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.
52%
13%
5% 3%
2%
25%
0%
10%
20%
30%
40%
50%
60%
Amazon Microsoft Alibaba Google IBM Others
MarketShare
https://www.gartner.com/en/newsroom/press-releases/2018-08-01-gartner-says-worldwide-iaas-public-cloud-services-market-grew-30-percent-in-2017

7. IT Brand Pulse estimates that AWS storage revenue is between 15 and 20%
of overall revenue. On the following slides 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 forQ4 2018 and our estimates,
AWS storage revenue was between $1.1 billion and $1.486 billion in Q2.
That is an annual storage run-rate of $4.4 to $5.944 billion…and growing
rapidly.

8. 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 Q3 18 Q4 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 $6,680 $7,430
STaaS @15% $158 $151 $175 $213 $235 $274 $313 $361 $385 $430 $485 $530 $549 $615 $688 $767 $816 $917 $1,002 $1,115
STaaS @20% $210 $201 $234 $284 $313 $365 $417 $481 $513 $573 $646 $707 $732 $820 $917 $1,023 $1,088 $1,222 $1,336 $1,486
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
Millions

9. $1,486
$371
$143 $86 $57
$714
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Amazon Microsoft Alibaba Google IBM Others
STaaSMarketShare
Source: Gartner, Worldwide IaaS Public Cloud Services Market Share, and IT Brand Pulse
Combine the Gartner IaaS market share
estimates with our estimate that up to 20% of
IaaS revenue comes from storage, and you get
a Q4 STaaS TAM of $2,587B. The following chart
showing STaaS revenue and rankings for Q4 18.

10. In the next slide we put the estimated AWS Q4 storage revenue of $1.1 to
$1.46 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.

11. Top 5 Companies,WorldwideTotal Enterprise Storage Systems Market, FourthQuarter of 2018 (Revenues are in US$ millions)
Company 4Q18 Revenue 4Q18 Market Share 4Q17 Revenue 4Q17 Market Share
4Q18/4Q17 Revenue
Growth
1. Dell Inc. $2,987.6 18.7% $2,603.1 17.9% 14.8%
2. HPE/H3C $2,606.3 16.3% $2,592.0 17.8% 0.6%
AWS $1,486 9.3% $1,023 7.0% 45.2%
T3. NetApp $842.3 5.8% $735.3 5.1% 14.6%
T3. IBM $698.5 4.8% $746.9 5.1% -6.5%
T5. Huawei $579.7 4.0% $514.6 3.5% 12.6%
T5. Lenovo $501.8 3.5% $306.1 2.1% 63.9%
T5. Hitachi $483.6 3.3% $453.1 3.1% 6.7%
ODM Direct $2,722.8 18.8% $2,764.3 20.5% -1.5%
Rest of Market $3,072.9 21.2% $2,782.2 19.0% 10.4%
Total $15,981 100.0% $14,520.7 100.0% 7.4%
Source: IDC Worldwide Quarterly Enterprise Storage Systems Tracker, March 7, 2019 and IT Brand Pulse

12. 69%
43%43%
47%
49%
81%
78%
69%
64%
58%
55%
47%
43%
42%42%
44%
48% 49%
46%45%
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 Q3 18 Q4 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
steady growth above 40% 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

13. 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.

14. Q4 18
(actual)
YoY
(est.)
Q4 19
(est.)
YoY
(est.)
Q4 20
(est.)
YoY
(est.)
Q4 2021
(est.)
Dell
EMC
$2,988 10% $3,287 10% $3,615 10% $3,977
HPE $2,606 0.6% $2,622 0.6% $2,637 0.6% $2,653
AWS $1,487 45.00% $2,156 45.00% $3,126 45.00% $4,533
AWS $1,487 40.00% $2,082 40.00% $2,914 40.00% $4,080
AWS $1,487 35.00% $2,007 35.00% $2,710 35.00% $3,658
Trajectory with DifferentYear overYear Growth Rates
In the model below, we estimated that the
growth rate for Dell storage would be
strong through 2021, HPE would see almost
zero growth as in 2018, andAWS would
enjoy from 35% to 45% annual growth.
Only if Dell EMC growth remains at 10%
and AWS growth decelerates to 35% per
year, does Dell remain #1.
It is more likely that AWS will race past the
pack in 2020 while sustaining with 40%
growth and driving over $15 billion in
annual storage revenue.

15. 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