GOLDMAN SACHS: 4 big tech companies will own 65% of the cloud market

  • Amazon, Microsoft, Google, and Alibaba will hold the lion's share of the cloud market, according to Goldman Sachs analyst Heather Bellini.
  • She sees massive consolidation in the cloud market with companies that are highly differentiated and can invest a significant amount of money upfront as being on top.
  • Check out the live stock price of Amazon, Microsoft, Google and Alibaba.


As businesses and individuals migrate their work and personal lives to the cloud, four companies will dominate the cloud platform market, according to Goldman Sachs.

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Amazon's Web Services, Microsoft's Azure, Alphabet's Google Cloud platforms and Alibaba will together make up 65% of cloud market share in 2017, Heather Bellini, an analyst at Goldman Sachs, wrote in a note to clients. She sees even more consolidation in the cloud platform business in the future, bringing the collective market share to around 89% by 2019. 

Salaries of employees at 25 top tech companies:

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Salaries of employees at 25 top tech companies
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Salaries of employees at 25 top tech companies

Google

Average annual bonus: $32,478

Average sign-on bonus: $27,547

Average annual base salary: $136,000

Netflix

Average annual bonus: $0

Average sign-on bonus: $3,520

Average annual base salary: $206,000

Twitter

Average annual bonus: $120

Average sign-on bonus: $26,144

Average annual base salary: $149,000

Apple

Average annual bonus: $20,298

Average sign-on bonus: $27,201

Average annual base salary: $102,000

Facebook

Average annual bonus: $33,225

Average sign-on bonus: $45,708

Average annual base salary: $145,000

Oculus VR

Average annual bonus: $395

Average sign-on bonus: $6,926

Average annual base salary: $119,000

Amazon

Average annual bonus: $24,732

Average sign-on bonus: $41,340

Average annual base salary: $118,000

Square

Average annual bonus: $988

Average sign-on bonus: $17,996

Average annual base salary: $134,000

Uber

Average annual bonus: $31,633

Average sign-on bonus: $1,807

Average annual base salary: $117,000

Pinterest 

Average annual bonus: $4,374

Average sign-on bonus: $33,376

Average annual base salary: $151,000

Tesla

Average annual bonus: $4,779

Average sign-on bonus: $19,447

Average annual base salary: $105,000

UnitedHealth Group

Average annual bonus: $7,280

Average sign-on bonus: $118

Average annual base salary: $87,000

Snap Inc.

Average annual bonus: $10,588

Average sign-on bonus: $23,705

Average annual base salary: $127,000

Hewlett Packard Enterprise Co.

Average annual bonus: $10,756

Average sign-on bonus: $8,265

Average annual base salary: $131,000

CSRA

Average annual bonus: $13,732

Average sign-on bonus: $1,186

Average annual base salary: $100,000

credit: Facebook

Capital One

Average annual bonus: $15,114

Average sign-on bonus: $8,568

Average annual base salary: $107,000

Fitbit

Average annual bonus: $18,069

Average sign-on bonus: $25,459

Average annual base salary: $128,000

Pandora

Average annual bonus: $22,316

Average sign-on bonus: $18,886

Average annual base salary: $109,000

Microsoft 

Average annual bonus: $23,224

Average sign-on bonus: $20,191

Average annual base salary: $179,000

Airbnb

Average annual bonus: $23,250

Average sign-on bonus: $23,250

Average annual base salary: $124,000

Arista Networks

Average annual bonus: $27,497

Average sign-on bonus: $18,652

Average annual base salary: $151,000

credit: Facebook

Linkedin

Average annual bonus: $32,216

Average sign-on bonus: $25,418

Average annual base salary: $149,000

Dropbox

Average annual bonus: $32,707

Average sign-on bonus: $32,833

Average annual base salary: $144,000

VMware

Average annual bonus: $33,145

Average sign-on bonus: $18,851

Average annual base salary: $147,000

Salesforce

Average annual bonus: $39,959

Average sign-on bonus: $28,314

Average annual base salary: $142,000

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"We believe that share will continue to consolidate around the largest platforms into an oligopolistic market structure," Bellini wrote in a note. She believes in a consolidation because the aforementioned companies are able to provide differentiated, value-added services that draw consumers to their platforms, as well as make significant capital investments in the short term. 

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Amazon's cloud leads the pack in terms of sales, bringing in $15.9 billion, while Microsoft, Google, and Alibaba have brought in $5 billion, $1.9 billion and $1.4 billion, respectively. While Amazon's year-over-year cloud sales growth rate was a respectable 43%, the other big three companies have expanded even more rapidly: Microsoft's sales were up 92% year-over-year, Alibaba's were up 97%, and Google's were up a whopping 158%.

Amazon Web Services has proven to be a cash cow for the company, boosting its financials as the rest of the company runs a deficit.

Amazon's stock is trading at $1,169.27 per share, and is up 54.97% for the year. Microsoft is at $85.85 per share, and is up 37.17%, Alibaba is at $175.32 per share and is up 97.53% over the year, and Google is at $1,051.59 per share and is up 30.31% a year.

To read how Amazon can become the fastest growing stock in 2018, click here.

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