Cloud research roundup: Big numbers from the big four

Recent research reports from around the industry saw a range of interesting cloud market results and predictions emerge, underlining the real world momentum behind the cloud story.  The big four – AWS, Microsoft, IBM and Google - dominate the market and their fortunes drive much of the analysis.  But what’s also clear is that there’s still plenty of room for even more growth both domestically and internationally.

Public cloud – a thriving oligopoly

In the cloud infrastructure services (public cloud) market, the big four continue to prosper, according to market research firm, Synergy.

In a sector worth $11bn a quarter globally, AWS remains well out in front of its rivals, commanding a bigger market share than Microsoft, IBM and Google combined.

According to Synergy, market share among these four was largely unchanged in the last four quarters, with the exception of Microsoft who saw an increase of 3%. And despite being a dynamic industry, it’s a similar trend to two years ago when AWS held a similarly dominant position.

Neither Google or Microsoft break out the figures for their respective public cloud offerings, but Amazon does specify numbers for AWS.  In their 2017 Q2 figures recently released, AWS posted a $916m profit in the three months ending in June, against revenues of $4.1bn and a 58% sales growth.

Let’s give this some context – Alphabet’s entire Q1 2017 revenue (of which Google Cloud is a non-specific part) was $24.75bn.  So, while public cloud is big money, there’s almost certainly plenty more to be made, with Synergy expecting overall growth rates of over 40% per year going forward.

A booming global market

Global spending on public cloud services will reach $226bn by 2021, according to IDC.

These are huge numbers, but to put them in perspective, Apple, the most profitable company in the world, brought in revenues of $233bn, according to Forbes 2016 rankings. Microsoft, a massive worldwide success story and employer of nearly 100,000 people, generated $85.3bn in the same year, a figure just ahead of the entire revenue of the worldwide information security market. 

The US will account for 60% of worldwide public cloud revenues ($163bn in 2021).  The industry’s leading the charge are professional services (sector growing at 21.5% pa), media (21%), retail and telecoms (both 20.9% annual growth).

IDC say that much of the spending growth in these industries is coming from “new projects and initiatives from functional areas like customer service and sales”.

But the UK lags behind on cloud adoption… maybe

Research by Fuze suggests only 10% of UK businesses have successfully managed to move their entire organisation to the cloud.  That compares to 45% of US organisations, who have completed their cloud migration.

On the one hand, this perspective assumes that an ‘all in’ cloud strategy is the only desirable end game.  But earlier in the year, the Cloud Industry Forum found that the overall cloud adoption rate in the UK stood at 88%, but the vast majority of companies would follow a hybrid strategy for some time to come.

Allure of cloud causes skill shortages in ‘traditional’ IT roles

The momentum behind the cloud market also appears to be hovering up talent and skills from more traditional on-premises roles, according to 451 Research. More than 65% of organisations in the survey found recruiting for roles across traditional servers and converged infrastructure to be “increasingly difficult”.

451 expect the rise of cloud migration to further diminish the pool of people available for roles dedicated to server administration.  They report that, “69.7% of respondents said that current candidates lack skills and experience [for on-premises roles]; plus a lack of candidates by region and high salaries point to a shrinking set of available talent.”

All of this research confirms what we already know: the cloud market is gargantuan and the potential for expansion is constantly growing. As organisations continually look to adopt increase the rate of cloud adoption, the vendor choices are small, but as everyone will tell you the rewards can be endless. 

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