To put a little meat on the bones of a comment I made in an earlier post, consider the graph above. Amazon’s share of the important web services marketplace is very nearly larger than the next 14 players put together, and not far from being larger than all of the other players put together.
And its market share is not decreasing over time. Most of the competition is among the players in the lower tier rather than between AWS and what you might think were its main competition, e.g. Microsoft, Google, IBM, etc.
Anyone who’s taken microeconomics courses beyond Econ 101 will recognize that as a classic structure of an oligopoly. Additionally, that Amazon is using its market power to extend its way into other markets is obvious, cf. home automation, advertising, artificial intelligence, even home cleaning.
It’s not to dispute the conclusion that AWS has a big lead – but any chart that excludes SAAS but includes hosted private cloud is misleading the state of play.
IBM is not #3 or even close to it.
The reality is to compete in the public cloud space one needs to spend on capex in the tens of billions a year (there is scale efficiency in designing multi billion datacenters). Unfortunately only a few companies have the means and will to take the risk to do so.
By the way, I don’t see how AWS is fueling Amazon’s push into other fields besides giving them capital to invest in new business.
Amazon created the smart home speaker market with the echo, their ad business is tied to their retail website, Amazon Go is quite ahead of the retail competition, etc.
This blog post http://www.platformonomics.com/2018/05/follow-the-capex-separating-the-clowns-from-the-clouds/ is a really good primer on the economic forces shaping the cloud industry and where the players are heading.
Those are both examples of using market position to enter other areas. It’s called “vertical integration”.