Synergy Research: Cloud Service Provider Rankings (See Comments for Details)

Cloud services market remains top heavy, with the large providers dominant. Synergy Research

………………………………………………………………………………………………………………………………………………………………………

According to Larry Dignan of ZDNET, “the cloud computing market in 2019 will have a decidedly multi-cloud spin, as the hybrid shift by players such as IBM, which is acquiring Red Hat, could change the landscape. This year’s edition of the top cloud computing providers also features software-as-a-service giants that will increasingly run more of your enterprise’s operations via expansion.

One thing to note about the cloud in 2019 is that the market isn’t zero sum. Cloud computing is driving IT spending overall. For instance, Gartner predicts that 2019 global IT spending will increase 3.2 percent to $3.76 trillion with as-a-service models fueling everything from data center spending to enterprise software.  In fact, it’s quite possible that a large enterprise will consume cloud computing services from every vendor in this guide. The real cloud innovation may be from customers that mix and match the following public cloud vendors in unique ways. ”

Key 2019 themes to watch among the top cloud providers include:

  • Pricing power. Google recently raised prices of G Suite and the cloud space is a technology where add-ons exist for most new technologies. While compute and storage services are often a race to the bottom, tools for machine learning, artificial intelligence and serverless functions can add up. There’s a good reason that cost management is such a big theme for cloud computing customers–it’s arguably the biggest challenge. Look for cost management and concerns about lock-in to be big themes.
  • Multi-cloud. A recent survey from Kentik highlights how public cloud customers are increasingly using more than one vendor. AWS and Microsoft Azure are most often paired up. Google Cloud Platform is also in the mix. And naturally these public cloud service providers are often tied into existing data center and private cloud assets. Add it up and there’s a healthy hybrid and private cloud race underway and that’s reordered the pecking order. The multi-cloud approach is being enabled by virtual machines and containers.
  • Artificial intelligence, Internet of things and analytics are the upsell technologies for cloud vendors. Microsoft Azure, Amazon Web Services and Google Cloud Platform all have similar strategies to land customers with compute, cloud storage, serverless functions and then upsell you to the AI that’ll differentiate them. Companies like IBM are looking to manage AI and cloud services across multiple clouds.
  • The cloud computing landscape is maturing rapidly yet financial transparency backslides. It’s telling when Gartner’s Magic Quadrant for cloud infrastructure goes to 6 players from more than a dozen. In addition, transparency has become worse among cloud computing providers. For instance, Oracle used to break out infrastructure-, platform- and software-as-a-service in its financial reports. Today, Oracle’s cloud business is lumped together. Microsoft has a “commercial cloud” that is very successful, but also hard to parse. IBM has cloud revenue and “as-a-service” revenue. Google doesn’t break out cloud revenue at all. Aside from AWS, parsing cloud sales has become more difficult.

IBM is more private cloud and hybrid with hooks into IBM Cloud as well as other cloud environments. Oracle Cloud is primarily a software- and database-as-a-service provider. Salesforce has become about way more than CRM.

………………………………………………………………………

6 thoughts on “Synergy Research: Cloud Service Provider Rankings (See Comments for Details)

  1. Synergy Research Group reports that cloud service providers capped a successful 2018 with a fourth quarter year-on-year increase in sales of 45%. Overall, cloud services providers saw their revenues grow 48% in 2018, and improvement over 2017 growth, says the market research firm.

    Synergy estimates that quarterly cloud infrastructure service revenues (including IaaS, PaaS and hosted private cloud services) approached $20 billion in the final three months of 2018, leading to a full-year total of almost $70 billion. Public IaaS and PaaS services were most popular, and revenues from such services increased by 49% in the 4th quarter of 2018. Geographically, the cloud market continues to grow strongly in all regions of the world.

    In public cloud, the dominance of the top five providers is even more pronounced, as they control over three quarters of the market. Amazon dominated the space in 2018; it was equivalent in size to its four nearest competitors combined. That said, Microsoft, Google, and Alibaba enjoyed growth that surpassed that of the overall market, with Microsoft having a particularly good year. Their increase in market share came mainly at the expense of small-to-medium sized cloud services providers, a trend that extended throughout the year (see “Cloud services demand booms in 1Q18: Synergy Research”). Overall, the market share of smaller players shrank five percentage points by the end of the year.

    “Q4 tops off a banner year for the cloud market with the annual growth rate actually nudging up from the previous year, which is an unusual phenomenon for a high-growth market of this scale,” said John Dinsdale, a chief analyst at Synergy Research Group. “The rate at which the market leaders continue to expand is really rather impressive. In aggregate the top five drove up their revenues in these segments by 60% in 2018, which has caused us to review and increase our five-year forecast for the market. Inevitably there will be a few road bumps along the way, but these will be minor relative to the factors that continue to drive the market.”

    https://www.srgresearch.com/articles/fourth-quarter-growth-cloud-services-tops-banner-year-cloud-providers

  2. Canalys: Cloud infrastructure spend grows 46% in Q4 2018 to exceed US$80 billion for full year

    The worldwide cloud infrastructure market had another strong quarter in Q4 2018, as spending grew 46% to nearly US$23 billion. Total outlay on cloud infrastructure in 2018 exceeded US$80 billion, up from US$55 billion in 2017 according to Canalys data. This makes it one of the most important sectors in the IT industry, not just by the rate of growth, but also its expanding size. Amazon Web Services (AWS) remained the dominant cloud service provider in Q4 2018, its share of customer spend unchanged at 32%. Microsoft Azure grew its share to 16% against 14% in the same period a year ago. Google Cloud hit 9% for the first time, while Alibaba Cloud maintained its 4% share. IBM, Salesforce, Oracle, NTT Communications, Tencent Cloud and OVH rounded out the top 10 cloud service providers.

    “Cloud infrastructure services provide the core components needed to support businesses’ digital transformation initiatives around building new customer experiences, deploying IoT to transform processes, using big data and analytics for better insights, and embedding machine learning and AI for automation,” said Canalys Principal Analyst Matthew Ball. “Market dynamics have changed over the last 12 months, with more businesses opting for multi-cloud and hybrid-IT environments to use the strengths of different cloud service providers and deployment models dependent on application and data requirements, compliance, cost and performance.”

    The role of channel partners in cloud services is growing in importance as a direct result of these trends, in particular, understanding customer requirements, recommending services, deployment and integration, as well as simplifying the billing and management of multiple cloud services.

    “Cloud service providers are placing greater emphasis on building channel programs to support the growing network of partners beyond the largest systems integrators, especially as they extend to mid-market and SMB customers,” said Canalys Chief Analyst Alastair Edwards. “Canalys expects the share of cloud business handled by or with channel partners to increase in 2019. Cloud service providers must therefore find ways to improve their own differentiation to partners and raise the maturity of their channel models.”

    Canalys expects a greater focus on rewarding partners with specialist expertise around specific cloud deployments, such as SAP HANA, analytics or security; on partners developing unique services on top of cloud; and on those driving customer adoption of cloud services. “Cloud service providers need to build trust with channel partners and not implement initiatives or change terms and conditions that drive more direct sales,” said Edwards. “Microsoft is the current dominant force in the channel for cloud services, through the continued expansion of its Cloud Solution Provider (CSP) program. But as it offers more direct purchasing options to Azure customers through its new Microsoft Customer Agreement, its partner strategy faces increased scrutiny. This
    creates an opportunity for rivals to exploit growing uncertainty among Microsoft’s partners.”

    About Canalys:

    Canalys is an independent analyst company that strives to guide clients on the future of the technology industry and to think beyond the business models of the past. We deliver smart market insights to IT, channel and service provider professionals around the world. We stake our reputation on the quality of our data, our innovative use of technology and our high level of customer service.

    https://www.canalys.com/static/press_release/2019/pr20190204.pdf

  3. IHS Markit has released top-line results from its latest “Cloud IT Infrastructure Service Provider Scorecard,” which is based on in-depth analysis of seven leading off-premises cloud IT service providers: Amazon (AWS), Google, IBM, Microsoft (Azure), Alibaba, Salesforce and CenturyLink.

    IHS Markit evaluated these service providers on select criteria including direct feedback from buyers, provider market share, market share momentum, financials, brand recognition, reputation for innovation and other benchmarks. Based on their overall scores, providers were classified as “leader,” “established” or “challenger.” The off-premises cloud service market segments analyzed for this scorecard include infrastructure as a service (IaaS), cloud as a service (CaaS) and platform as a service (PaaS).

    For 2018, Alibaba, Amazon, Google, IBM and Microsoft earned “leader” rankings for cloud IT infrastructure services. CenturyLink was identified as an “established” player and Salesforce was categorized as a “challenger.”

    “Leadership in the cloud IT infrastructure services market requires a diverse portfolio, and all of the leaders have strong brand awareness and a reputation of innovation,” said Devan Adams, principal analyst, cloud and data center research practice, IHS Markit. “Established players can leverage an existing service client base and offer extensive network infrastructure. However, in most cases they lack market momentum. Challengers, by comparison, boast an innovative services portfolio and strong market share momentum, but they have limited offerings or market presence.”

  4. Very informative article on Cloud Service Provider rankings. I learned a lot of new information from the post. Great analysis in the comments.

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

*

 
 

 

Recent Posts