Major drivers for the rising dominance of the hyperscalers in the infrastructure as a service market segment

Abstract

The rapidly growing worldwide market for infrastructure as a service (IaaS) is increasingly dominated by four hyperscalers. On the flip side, the market share and number of regional IaaS providers have been declining steadily over the past years. Astonishingly, this fight for market shares has been largely neglected by the research community. The goal of this study is to identify the major drivers for this market development. To this end, 18 exploratory expert interviews were conducted with high-ranking employees of various successful regional IaaS providers in Germany. The results indicate that the central driver is the significant lower price of the hyperscalers' offerings. Beyond that, eight additional important drivers have been identified. This study sheds light on the IaaS market and opens up future in-depth investigations. Regional IaaS providers can use these insights to develop strategies and business models for counteracting or at least decelerating the hyperscalers' growing dominance.