Gartner: AWS, Azure, and Google Cloud top rankings for Cloud Infrastructure and Platform Services
Gartner’s latest Magic Quadrant report for cloud infrastructure and platform services (CIPS) ranks Amazon Web Services (AWS), Microsoft Azure, and Google Cloud as the top cloud service providers.
Beyond the top three players, Gartner placed Alibaba Cloud in the “visionaries” box, and ranked Oracle, Tencent Cloud, and IBM as “niche players,” in that order.
The scope of Gartner’s Magic Quadrant for CIPS includes infrastructure as a service (IaaS) and integrated platform as a service (PaaS) offerings. These include application PaaS (aPaaS), functions as a service (FaaS), database PaaS (dbPaaS), application developer PaaS (adPaaS) and industrialized distributed cloud offerings that are often deployed in enterprise data centers (i.e. private clouds).
Figure 1: Magic Quadrant for Cloud Infrastructure and Platform Services
1. Gartner analysts praise Amazon AWS for its broad support of IT services, including cloud native, edge compute, and processing mission-critical workloads. Also noteworthy is Amazon’s “engineering prowess” in designing CPUs and silicon. This focus on owning increasingly larger portions of the supply chain for cloud infrastructure bolsters the No. 1 cloud provider’s long-term outlook and earns it advantages against competitors, according to the Gartner report.
“AWS often sets the pace in the market for innovation, which guides the roadmaps of other CIPS providers. As the innovation leader, AWS has materially more mind share across a broad range of personas and customer types than all other providers,” the analysts wrote.
AWS, which recently achieved $59 billion in annual revenues, contributed 13% of Amazon’s total revenue and almost 54% of its profit during second-quarter 2021.
AWS’s future focus is on attempting to own increasingly larger portions of the supply chain used to deliver cloud services to customers. Its operations are geographically diversified, and its clients tend to be early-stage startups to large enterprises.
2. Microsoft Azure, which remains the #2 Cloud Services Provider, sports a 51% annual growth rate. It earned praise from Gartner for its strength “in all use cases, which include the extended cloud and edge computing,” particularly among Microsoft-centric organizations.
The No. 2 public cloud provider also enjoys broad appeal. “Microsoft has the broadest set of capabilities, covering a full range of enterprise IT needs from SaaS to PaaS and IaaS, compared to any provider in this market,” the analysts wrote.
Microsoft has the broadest sets of capabilities, covering a full range of enterprise IT needs from SaaS to PaaS and IaaS, compared to any provider in this market. From the perspective of IaaS and PaaS, Microsoft has compelling capabilities ranging from developer tooling such as Visual Studio and GitHub to public cloud services.
Enterprises often choose Azure because of the trust in Microsoft built over many years. Such strategic alignment with Microsoft gives Azure advantages across nearly every vertical market.
“Strategic alignment with Microsoft gives Azure advantages across nearly every vertical market,” Gartner said. However, Gartner criticized Microsoft for very complex licensing and contracting. Also, Microsoft sales pressures to grow overall account revenue prevent it from effectively deploying Azure to bring down a customer’s total Microsoft costs.
Microsoft Azure’s forays in operational databases and big data solutions have been markedly successful over the past year. Azure’s Cosmos DB and its joint offering with Databricks stand out in terms of customer adoption.
3. Google Cloud Platform (GCP) is strong in nearly all use cases and is slowly improving its edge compute capabilities. Google continues to invest in being a broad-based provider of IaaS and PaaS by expanding its capabilities as well as the size and reach of its go-to-market operations. Its operations are geographically diversified, and its clients tend to be startups to large enterprises.
The company is making gains in mindshare among enterprises and “lands at the top of survey results when infrastructure leaders are asked about strategic cloud provider selection in the next few years,” Gartner analysts wrote. Google is also closing “meaningful gaps with AWS and Microsoft Azure in CIPS capabilities,” and outpacing its larger competitors in some cases, according to the report.
The analysts also noted that Google Cloud “is the only CIPS provider with significant market share that currently operates at a financial loss.” The No. 3 public cloud provider reported a 54% year-over-year revenue increase and a 59% decrease in operating losses during Q2.
Separately, Dell’Oro Group Research Director Baron Fung recently said that hyperscalers make up a big portion of the overall IT market, with the 10 largest cloud-service providers, including AWS, Google, and Alibaba, accounting for up to 40% of global data center spending, and “some of these companies can have really tremendous weight on the ecosystem.”
The Dell’Oro report noted that some providers have deployed accelerated servers using internally developed artificial intelligence (AI) chips, while other cloud providers and enterprises have commonly deployed solutions based on graphics processing units (GPUs) and FPGAs.
Fung explained that this model has also spilled over into those cloud providers also building their own servers and networking equipment to better fit their needs while “moving away from the traditional model in which users are buying equipment from companies like Dell and [Hewlett Packard Enterprise]. … It’s really disrupting the vendor landscape.”
Certain applications—such as cloud gaming, autonomous driving, and industrial automation—are latency-sensitive, requiring Multi-Access Edge Compute, or MEC, nodes to be situated at the network edge, where sensors are located. Unlike cloud computing, which has been replacing enterprise data centers, edge computing creates new market opportunities for novel use cases.
5-Year Forecast: Server CPU Refresh, Accelerated Computing, and Edge Computing to Drive Future Data Center Spending
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“The goal here is to work with the carriers,” explained Sunay Tripathi, Google’s new director and head of products for telecom and the “distributed cloud edge.”
Tripathi, who spoke at a 5G Future Forum event here, typified the new trend: He cut his teeth at Sun Microsystems before helping to found software-defined networking company Pluribus Networks. For the past three years, he was the CTO of Deutsche Telekom’s MobiledgeX. According to his LinkedIn profile, he joined Google in July. “We are rearchitecting a lot of the underlying network, and that creates a lot of opportunity,” Tripathi explained.
Google, Microsoft and Amazon have long played in the telecom industry as software, IT and cloud suppliers. And like most modern enterprises across all industries, mobile network operators have increasingly pushed their IT operations into the public cloud.
But during the past two years, Google, Microsoft and Amazon have all begun developing cloud computing products specifically designed to host wireless providers’ network functions. Whether it’s Microsoft’s Azure for Operators or Google’s Anthos for Telecom, it’s intended to get network operators to put their crown jewels – their core network functions – into a hyperscale cloud.
And it’s something all three cloud companies are serious about, judging from their telecom hiring sprees or their acquisitions in the space. Microsoft, for example, last year spent an estimated $1.8 billion buying longtime telecom vendors Affirmed Networks and Metaswitch Networks.
New ideas and new disruption
According to analysts, the entry of the public cloud hyperscalers represents a major new strategic turn in the industry, considering network operators have historically retained tight control over their networking systems. And though most have been moving toward cloud technologies they own and operate, few have agreed to run their networking software in a public cloud operated by a hyperscaler.
“In outsourcing the infrastructure to cloud providers, telcos risk losing control of different aspects of their network and technology roadmap over the long term,” warned analyst Frank Rayal of Xona Partners in a post to his website titled “How telcos outsourced their brains.”
Nonetheless, there are increasing indications that operators around the world are more than open to the idea. “The technologies that we will build [with the cloud] will let others consume our network,” explained Luciano Ramos, SVP of network development, planning and engineering for Rogers Comunications in Canada.
Indeed, AT&T recently announced it would transition its 5G core network operations into Microsoft’s cloud over the next three years. And Dish Network plans to run all of its network operations in the Amazon Web Services cloud.
According to Rakuten’s outspoken mobile chief, Tareq Amin, it’s ultimately necessary. He said he designed Rakuten’s mobile network in Japan to natively run in the cloud, and that it required a major shift in his team’s thinking. “I wanted to pick the right mentality” when staffing up Rakuten Mobile, he said. “It was easier to deploy cloud because the Rakuten people wanted to be open to new ideas,” he said. “They were open to new ideas and new disruption.”
Amin made his comments during a keynote address at the MWC LA show here. He made sure to point out that Rakuten Mobile in Japan now counts around 5 million customers, and boasts leading network metrics. It was essentially Amin’s victory lap after announcing his plan to build such a network just a few years ago, at the MWC Barcelona show in 2019.
Amazon Web Services beat expectations (by $651 million) with revenues of $16.11 billion. Its operating income, $4.88 billion, was up almost 40% from a year ago.
Put differently, Amazon’s cloud unit, leading the cloudy sector with a 41% market share, had more operating income than the company as a whole. It makes up 15% of the company’s total revenue, with its operating margin widening to 30.3% from 28.3% in the previous quarter.
“A lot of customers accelerated their journey to the cloud based on the pandemic,” said Amazon’s chief financial officer, Brian Olsavsky, on a conference call.
“AWS Cloud WAN removes the difficulty of stitching together and managing third-party tools so customers can now more easily keep their networks securely connected and high performing,” David Brown, VP of AWS Elastic Compute Cloud, said in a statement.
Cloud WAN works like most middle-mile network providers. In the case of branch-to-branch communications, customer traffic travels a short distance across the internet to the nearest AWS data center where it hops aboard the cloud provider’s private network.
Once on the network, customers can define how that traffic should be routed between AWS data centers based on networking and security policy configured in the Cloud WAN dashboard. The traffic then leaves AWS’ network at the data center closest to its destination — or as dictated otherwise by routing policy — and completes its final leg once again over the internet.
While Cloud WAN supports a variety of popular SD-WAN vendors at launch, it should be noted that SD-WAN is not a prerequisite. The service also supports AWS VPN, Direct Connect, and Transit Connect Gateway as on ramps.
However, according to Cisco’s Raj Gulani, senior director of product management for enterprise cloud and SD-WAN, using AWS Cloud WAN in conjunction with SD-WAN provides numerous benefits.
By integrating with Cloud WAN, SD-WAN customers can extend their existing WANs into and across AWS’ private network, enabling consistent networking and security policy enforcement, he said. “We can actually orchestrate the entire internal network backbone with just a push of a script from our side and that gets honored by AWS.”
This is possible thanks to deep API integrations with Cloud WAN that enable SD-WAN vendors, like Cisco, to orchestrate the middle-mile network based on the customer’s intent, he explained. “Now we can actually honor the enterprise SD-WAN policy from an intent perspective.”
By extending the SD-WAN overlay across AWS Cloud WAN customers can also maintain visibility and more importantly, extend network segmentation across the middle mile, noted Karl Brown, senior director of product marketing for VMware’s SASE business unit, in an interview with SDxCentral. “If they [the customer] had segmented guest traffic from employee traffic, if they had segmented different internal teams … we can maintain that segmentation across the AWS Cloud WAN.”
Cloud WAN Competition Amps Up
AWS is far from the first cloud provider to venture down this path. Earlier this year, Google announced the evolution of its SD-WAN Cloud Hub platform — which bears striking similarities to Transit Connect Gateway and Direct Connect — to support middle-mile transport.
Google Cloud’s Network Connectivity Center, similar to AWS Cloud WAN, provides a single dashboard for provisioning and managing VPN tunnels and SD-WAN interconnects. Cisco was among the first to announce support for the service and was joined by rival SD-WAN vendors Fortinet and Versa late this spring.
Meanwhile, Microsoft introduced this functionality more than a year earlier in an update to the Azure Virtual WAN Hub. In addition to providing an on-ramp to workloads running in Azure, vWAN provides a platform on which technology partners could extend their SD-WAN overlays across the public cloud provider’s network.
While not public cloud providers, content delivery network (CDN) and domain name system (DNS) providers Cloudflare also offers similar transport services targeted at SD-WAN customers.
Building on these developments, many SD-WAN vendors see an opportunity to glue the various clouds together, enabling branches, users, and workloads to communicate seamlessly regardless of where they’re located or on which cloud they’re running.
“What VMware, as a company, will provide is a means to go across cloud and provide security and connectivity as you shift data and workloads across the different cloud providers,” Karl Brown said.
VMware isn’t alone in this endeavor. Cisco and Fortinet have announced similar plans to address multi-cloud networking challenges using their SD-WAN and security platforms.
Hyperscalers with their global scale are encroaching on the international and global aspects of the telecoms industry. Cloud brings a new means of delivering many services into both the CSPs themselves as well as business es and individuals. Hyperscalers are extending their reach ever closer to the customers, potentially squeezing the role of the connectivity providers. CSPs, on the other hand, have the hyper-local granularity to serve everyone and everything. As CSPs rationalise their own infrastructure they are benefiting from the Hyperscalers scale and skills to make themselves more attractive to the end user markets. Does this end in a Mexican stand-off, global political manoeuvring or national pride? Can they play nicely together in the digital sandpit or will it end in tears?
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