Telcos need to do much more to gain significant cloud market share

Synergy Research Group said that the global cloud computing and storage market grew 24% annually for the period ending September 2017.  The market research firm said that of the six cloud services and infrastructure market segments, operator and vendor revenues, IaaS (Infrastructure as a Service) and PaaS (Platform as a Service) had the highest growth rate at 47%, followed by enterprise SaaS (Software as a Service) at 31%, and hosted private cloud infrastructure services at 30%.

Data suggested that 2017 widened the gap between cloud services spending vs. hardware and software used to build public and private clouds. Synergy noted that 2016 was the year in which spending on cloud services overtook spending on cloud infrastructure.

John Dinsdale, a chief analyst and research director at Synergy Research Group, noted that in 2015 cloud became mainstream and by 2016 it started to dominate many IT market segments.

“Major barriers to cloud adoption are now almost a thing of the past, with previously perceived weaknesses such as security now often seen as strengths. Cloud technologies are now generating massive revenues for cloud service providers and technology vendors and we forecast that current market growth rates will decline only slowly over the next five years,” he concluded.

The researcher noted eight cloud services vendors  were among the 2017 market segment leaders.

Figure 1: Movers and shakers in 2017 cloud market

Figure 1: Movers and shakers in 2017 cloud market

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Over the period Q4 2016 to Q3 2017, total spend on hardware and software to build cloud infrastructure approached $80 billion, split evenly between public and private clouds, though spend on public cloud is growing more rapidly.

Infrastructure investments by cloud service providers helped them to generate over $100 billion in revenues from cloud infrastructure services (IaaS, PaaS, hosted private cloud services) and enterprise SaaS – in addition to which that cloud provider infrastructure supports internet services such as search, social networking, email, e-commerce and gaming.

Meanwhile UCaaS (Unified Communications as a Service), while in many aspects is a different market, is also growing strongly and is driving some radical changes in business communications.

Carriers, for their part, are not standing still. According to Gartner Group, communications service providers (CSPs) worldwide face profound challenges related to  traditional telco network-based to cloud-based service delivery across several functional and technical domains.

Gartner research director Martina Kurth said “CSPs are embarking upon an evolutionary path that unifies cloud instances of SDN/NFVOSS/BSS (e.g. Paas/SaaS/Iaas) and enterprise IT. Coupled with microservices, container based service design principles and cloud integration services, CSPs endeavor to create synergies between their various cloud domains and drive flexibility and agility across their cloud deployments.”

Gartner predicts that vendors which are well positioned in the end-to-end Telco Cloud stack market, are also likely to take market share in corresponding future network and/or IT technology markets such as digital technology platforms and ecosystems, Data/AI, IoT and 5G.

Gartner Group says that a fully integrated, interoperable, cloud and virtualied telco protocol stack will pave the evolutionary technology adoption path from SDN/NFV to network slicing to 5G and IoT in the future.  But no time frame was given for that to be realized.

2 thoughts on “Telcos need to do much more to gain significant cloud market share

  1. AT&T believes digital transformation will continue to fuel accelerated adoption of cloud in 2018. “The cloud industry is growing rapidly and the industry as a whole is expected to double over the next five years, and over half of IT spend is moving that way,” said AT&T’s David Ohrn.

    Over 90% of AT&T’s 3.5 million customers are “either actively adopting, or in the process of migrating, or even just managing certain components of their business in the cloud,” adds Ohrn. AT&T has undergone its own significant cloud transformation, moving over 80% of IT workloads to the cloud, which Ohrn says will make AT&T more agile and allow the company to operate under “better cost structures than ever before.”

    As customers undergo their own digital transformations and cloud migrations, Ohrn says it’s key to look at their overall network design, and anticipate future changes to that design as well as how security policies and procedures will change during the migration process.

    http://www.lightreading.com/business-employment/business-transformation/atandt-on-cloud-migration-this-petri-dish-breeds-big-data-benefits/d/d-id/740072

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