MTN and Microsoft Azure accelerate Africa’s digital transformation via the public cloud
South Africa-based network operator MTN has joined the growing list of telcos that are making the move to public cloud. Following the signing of a five-year strategic partnership in September 2022, MTN and Microsoft are in the process of delivering a program of work that will see the latest technologies deployed for the benefit of MTN’s customers, starting with South Africa and Nigeria.
The company announced it has embarked on a program of work to migrate various back end systems to Microsoft Azure. It is called Project Nephos, and its principle aim is to deliver maximum value as early as possible by identifying the workloads most suited to being redeployed on Azure. It’s initiating the project by transferring the BSS and OSS applications used by MTN’s opcos in South Africa and Nigeria. This approach has already enabled MTN to complete a proof of concept for the world’s first 5G standalone core network solution deployed in Microsoft’s Azure public cloud in just a few weeks!
Under the program, MTN will also migrate EVA, its core big data platform. In addition to putting it existing workloads on Azure, MTN also plans to leverage its capabilities in AI and machine learning to come up with new use cases that, in MTN’s own words, “bridge typical divides across network, IT and commercial domains.”
MTN and Microsoft have hired Accenture to provide technology implementation, integration and support services in hopes of making the whole thing go smoothly. They have also launched a staff training program that covers cloud technologies, devsecops (development, security, and operations), and data management.
MTN and Microsoft first announced they were working together in November last year. Their five-year strategic partnership centres on transforming and modernising MTN’s comms and technology infrastructure, and building what MTN hopes will be the largest and most valuable platform business with a clear focus on Africa.
Given MTN’s scale – it serves more than 270 million subscribers across 19 markets in Africa and the Middle East – it is a pretty big deal. It has echoes of Dish deploying its greenfield 5G network on Amazon Web Services (AWS), or AT&T announcing plans to move its 5G network onto Azure.
In addition to Monday’s OSS/BSS migration, MTN and Microsoft last week showed off what they claim to be the world’s first proof-of-concept (PoC) of a 5G standalone (SA) core network deployed on Microsoft Azure.
Every element, including the control plane, user plane and management nodes was fully deployed on Microsoft’s South Africa Azure Region, giving MTN a taste of what it can expect from a cloud-native 5G network, i.e., rapid deployment and scalability. These two capabilities are particularly important to MTN, which aims to reach 10-30% population coverage with its 5G network in the medium term.
“Our strategic partnership with Microsoft will enable us to transform the way we deliver products and services to our customers. We will bring the power of cloud computing to life, driving development and innovation with speed, flexibility and predictable investments and operations. We remain focused on nurturing the digital skills within MTN and in the societies we operate in, and building digital platforms to drive digital transformation across Africa and the Middle East,” said Nikos Angelopoulos, MTN Group’s CIO, in a statement.
“Harnessing the power of MTN, Microsoft and Accenture, we will be working closely together to build the next wave of compressed digital transformation across the continent. We see this program becoming a global standard in the industry for years to come” Nitesh Singh Communications, Media and Technology Lead for Accenture Africa.
MTN and Microsoft accelerate Africa’s digital transformation in the public cloud
Oracle and Microsoft Enhance Interoperability of their Cloud Platforms (facilitating multi-cloud)
At Microsoft Inspire, an online event for Microsoft partners, Oracle and Microsoft announced a deeper interoperability of their cloud platforms which will permit customers to more easily run projects across their two cloud platforms. The new service connects Oracle’s database service directly to the Azure cloud, eliminating custom work that previously would have been required.
With the general availability of Oracle Database Service for Microsoft Azure, Microsoft Azure customers can easily provision, access, and monitor enterprise-grade Oracle Database services in Oracle Cloud Infrastructure (OCI) with a familiar experience. Users can migrate or build new applications on Azure and then connect to high-performance and high-availability managed Oracle Database services such as Autonomous Database running on OCI.
Years ago, many cloud providers tried to lock customers into a single platform, but that is no longer feasible as the cloud has become more central to operations. Customers typically use multiple clouds, and cloud platform providers such as Microsoft and Oracle are adapting to that multi-cloud environment. About two-thirds of enterprise-level companies use multiple clouds (AKA multi-cloud), according to a May 2021 report by Boston Consulting Group.
Since 2019, when Oracle and Microsoft partnered to deliver the Oracle Interconnect for Microsoft Azure, hundreds of organizations have used the secure and private interconnections in 11 global regions.
Microsoft and Oracle are extending this collaboration to further simplify the multicloud experience with Oracle Database Service for Microsoft Azure. Many joint customers, including some of the world’s largest corporations such as AT&T, Marriott International, Veritas and SGS, want to choose the best services across cloud providers to optimize performance, scalability, and the ability to accelerate their business modernization efforts. The Oracle Database Service for Microsoft Azure builds upon the core capabilities of the Oracle Interconnect for Azure and enables customers to more easily integrate workloads on Microsoft Azure with Oracle Database services on OCI. Customers are not charged for using the Oracle Database Service for Microsoft Azure or for the underlying network interconnection, data egress, or data ingress between Azure and OCI. Customers will pay only for the other Azure or Oracle services they consume, such as Azure Synapse or Oracle Autonomous Database.
“Over the last couple years we have had a lot of success with Oracle Interconnect for Microsoft Azure. And we also got a lot of customer feedback. And one of the things that customers (said) was, ‘Hey, it’s great you are working together, but we really would like a more integrated experience,’” said Clay Magouyrk, executive vice president, Oracle Cloud Infrastructure.
“Microsoft and Oracle have a long history of working together to support the needs of our joint customers, and this partnership is an example of how we offer customer choice and flexibility as they digitally transform with cloud technology. Oracle’s decision to select Microsoft as its preferred partner deepens the relationship between our two companies and provides customers with the assurance of working with two industry leaders,” said Corey Sanders, corporate vice president, Microsoft Cloud for Industry and Global Expansion. “The ability to benefit from both clouds, and the flexibility, is a real win for customers,” Sanders added.
“There’s a well-known myth that you can’t run real applications across two clouds. We can now dispel that myth as we give Oracle and Microsoft customers the ability to easily test and demonstrate the value of combining Oracle databases with Azure applications. There is no need for deep skills on either of our platforms or complex configurations—anyone can use the Azure Portal to harness the power of our two clouds together,” said Clay Magouyrk, executive vice president, Oracle Cloud Infrastructure.
“Multi-cloud takes on a whole new meaning with the launch of the Oracle Database Service for Microsoft Azure. This service, designed to provide intuitive, simple access to the Exadata Database Service and Autonomous Database to Azure users in a transparent manner, responds to the critical need of Azure and Oracle customers to apply the benefits of the latest in Oracle Database technology to their Azure workloads. This combined and interactive connection of services across public clouds sets the stage for what a multi-cloud experience should be, and is a bold statement about where the future of cloud is heading. It should deliver huge benefits for customers, developers, and the cloud services landscape overall,” said Carl Olofson, research vice president, Data Management Software, IDC.
With the new Oracle Database Service for Microsoft Azure, in just a few clicks users can connect their Azure subscriptions to their OCI tenancy. The service automatically configures everything required to link the two cloud environments and federates Azure Active Directory identities, making it easy for Azure customers to use the service. It also provides a familiar dashboard for Oracle Database Services on OCI using Azure terminology and monitoring with Azure Application Insights.
“Many of our mission-critical workloads are running Oracle databases on-premises at massive scale. As we move these workloads to the cloud, Oracle Database Service for Azure enables us to modernize these Oracle databases to services such as Autonomous Database in OCI while leveraging Microsoft Azure for the application tier,” said Jeremy Legg, chief technology officer, AT&T. Watch the video.
“Multi-cloud architectures enable us to choose the best cloud provider for each workload based on capabilities, performance, and price. The OCI and Azure partnership integrates the capabilities of two major cloud providers, including the Oracle Database services in OCI and Azure’s application development capabilities,” said Naveen Manga, chief technology officer, Marriott International. Watch the video.
“Oracle Database Service for Microsoft Azure has simplified the use of a multicloud environment for data analytics. We were able to easily ingest large volumes of data hosted by Oracle Exadata Database Service on OCI to Azure Data Factory where we are using Azure Synapse for analysis,” said Jane Zhu, senior vice president and chief information officer, Corporate Operations, Veritas.
“Oracle Database Service for Microsoft Azure simplifies our multi-cloud approach. We’re going to be able to leverage the best of Oracle databases in Azure, and we are going to be able to keep our infrastructure in Azure. This is a great opportunity to have the best of the two worlds that eases our migration to the cloud and improves the skills of our people in IT,” said David Plaza, chief information officer, SGS. Watch the video.
IDC: Worldwide Public Cloud Services Revenues Grew 29% to $408.6 Billion in 2021 with Microsoft #1?
The worldwide public cloud services market, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service – System Infrastructure Software (SaaS – SIS), and Software as a Service – Applications, grew 29.0% year over year in 2021 with revenues totaling $408.6 billion, according to the International Data Corporation (IDC) Worldwide Semiannual Public Cloud Services Tracker.
Spending continued to consolidate in 2021 with the combined revenue of the top 5 public cloud service providers (Microsoft, Amazon Web Services, Salesforce Inc., Google, and SAP) capturing nearly 40% of the worldwide total and growing 36.6% year over year. With offerings in all four deployment categories, Microsoft captured the top position in the overall public cloud services market with 14.4% share in 2021, followed closely by Amazon Web Services with 13.7% share.
“Organizations continued their strong adoption of shared public cloud services in 2021 to align IT investments more closely with business outcomes and ensure rapid access to the innovations required to be a digital-first business,” said Rick Villars, group vice president, Worldwide Research at IDC. “For the next several years, leading cloud providers will play a critical role in helping enterprises navigate the current storms of disruption (inflation, supply chain, and geopolitical tensions), but IT teams will also focus more on bringing greater financial accountability to the variable spend models of public cloud services.”
While the overall public cloud services market grew 29.0% in 2021, revenue for foundational cloud services* that support digital-first strategies saw revenue growth of 38.5%. This highlights the increasing reliance of enterprises on a cloud innovation platform built around widely deployed compute services, data/AI services, and app framework services to drive innovation. IDC expects spending on foundational cloud services (especially IaaS and PaaS elements) to continue growing at a higher rate than the overall cloud market as enterprises leverage cloud to overcome the current disruptions and accelerate their shift toward digital business.
“The last few years have demonstrated that in challenging times, businesses increasingly rely on cloud services to modernize their operations and deliver more value to customers,” said Dave McCarthy, research vice president, Cloud and Edge Infrastructure Services. “This trend is expected to continue as public cloud providers offer more ways of extending cloud services to on-premises datacenters and edge locations. These expanded deployment options reduce many barriers to migration and will facilitate the next wave of cloud adoption.”
“In the digital-first world, enterprises that are serious about competing for the long term use the lens of business outcomes to evaluate strategic technology decisions, which fuels the fast-growing ecosystem seen in the public cloud market,” said Lara Greden, research director, Platform as a Service, IDC. “Cloud service providers showed relentless drive to enhance the productivity of developers and overall speed of application delivery, including emphasis on containers-first and serverless-first approaches.”
“SaaS applications remain the largest and most mature segment of public cloud, with 2021 revenues that have now reached $177 billion. The tailwinds of the pandemic continued to fuel expedited upgrades and replacements of older systems in 2021, though company goals haven’t changed. Companies seek applications that will help increase enterprise intelligence, improve operational efficiency, and drive better decision making. Ease of use, ease of implementation and integration, streamlined workflows, data and analytical accessibility, and time to value are the key criteria driving purchasing decisions, though verticalization has also steadily increased as a key priority,” said Eric Newmark, group vice president and general manager of IDC’s SaaS, Enterprise Software, and Worldwide Services division.
|Worldwide Public Cloud Services Revenue and Year-over-Year Growth, Calendar Year 2021 (revenues in US$ billions)|
|Deployment Category||2021 Revenue||Market Share||2020 Revenue||Market Share||Year-over-Year Growth|
|SaaS – Applications||$177.8||43.5%||$143.9||45.4%||23.5%|
|SaaS – System Infrastructure Software||$71.2||17.4%||$56.4||17.8%||26.4%|
|Source: IDC Worldwide Semiannual Public Cloud Services Tracker, 2H 2021|
While both the foundational cloud services market and the SaaS – Applications market are led by a small number of companies, there continues to be a healthy long tail of companies delivering cloud services around the globe. In the foundational cloud services market, these leading companies account for nearly three quarters of the market’s revenues with targeted use case-specific PaaS services or cross-cloud compute, data, or network governance services. The long tail is more pronounced in the SaaS– Applications market, where customers’ growing focus on specific outcomes ensures that over two thirds of the spending is captured outside the top 5.
We remain SUPER SKEPTICAL about IDC’s claim that Microsoft beat out cloud rival Amazon Web Services (AWS) in capturing the largest share of global public cloud services revenue last year. That conflicts with all our other resource checks!!!
IDC reported that Microsoft accumulated 14.4% of the market’s $408.6 billion in revenues last year, just a whisker ahead of the 13.7% that AWS snared. Microsoft has offerings in all four sections of the public cloud services market lumped by IDC into its report, including infrastructure as a service (IaaS), platform as a service (PaaS), system infrastructure SaaS, and application SaaS.
Salesforce, Google, and SAP rounded out the top five in IDC’s ranking, with those vendors capturing 40% of the total market. Overall market revenues increased 29% compared to the previous year.
SaaS applications brought in the most cloud services revenue with $177.8 billion, representing 23.5% growth from the year prior. IaaS accounted for $91.3 billion of revenue, followed by system infrastructure SaaS and PaaS.
Of the categories comprising IDC’s public cloud foundational services, PaaS saw the highest year-over-year growth at 39.1%, though it brought in the least 2021 revenue at $68.2 billion.
“Organizations continued their strong adoption of shared public cloud services in 2021 to align IT investments more closely with business outcomes and ensure rapid access to the innovations required to be a digital-first business,” IDC VP Rick Villars said in a statement.
In an increasingly digital world, enterprises that are truly thinking ahead use a business outcomes lens to make strategic decisions, and this is what fuels public cloud ecosystem growth, IDC PaaS Research Director Lara Greden explained.
Cloud service providers played their part in that growth this year with a “relentless drive” to improve developer productivity and speed of application delivery, “including emphasis on containers-first and serverless-first approaches,” she added.
Villars expects these cloud giants will continue to have a crucial role in helping enterprises solve persistent market challenges like supply chain disruption, inflation, and geopolitical tension.
“IT teams will also focus more on bringing greater financial accountability to the variable spend models of public cloud services,” Villars added.
* Note: IDC defines Foundational Cloud Services as the Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service – System Infrastructure Software (SaaS – SIS) market segments where the top eight public cloud services providers (Amazon Web Services, Microsoft, Google, Alibaba Group, IBM, Tencent, Huawei, and Oracle) account for most of the revenue. These include the following key service portfolios:
- Compute Services: Virtualized x86 Compute, Bare Metal Compute, Block Storage, Accelerated Compute, Other Compute, and Software-Defined Compute Software.
- Data Services: Data Management Systems, Object Storage, File Storage, and Event Stream Processing Software.
- App Framework Services: Developer-centric software to develop and deploy applications in the cloud, including lifecycle management. These services include Integration Software, Deployment-Centric Application Platforms, and AI Lifecycle Software.
- Usage Multiplier Services: Services that encourage greater/more effective use of high value services by making it easier to adopt, connect, deploy, track, secure, and update those services. Includes load balancing and DNS as well as marketplaces and bundles of open-source software solutions.
IDC’s New Public Cloud Numbers: Microsoft Azure Edged Out AWS in 2021
IDC: Microsoft Azure now tied with AWS as top global cloud services provider
Microsoft proposes a 5G overlay on their “Azure for Operators” cloud WAN
In a blog post, Microsoft proposes to sell global data transport and routing services to 5G network operators under its new Azure for Operators business. The proposition (described below) is to use a 5G overlay on Microsoft Azure’s cloud WAN.
“Operators spend a lot of money to manage and maintain their networks and peering relationships, but so does Microsoft. The question then is, why are two massive industries doing the same thing? Because both parties move packets around, doesn’t it make more sense for them to collaborate?” wrote Victor Bahl, Microsoft CTO of the company’s new Azure for Operators business, in a blog post to the company’s website. “Here, the well-managed, reliable, and performant Azure network should be thought of as the backbone that operators trust. With this shift in thinking will come all the advantages of innovation that IT companies like Microsoft are rapidly bringing in.”
Azure’s planet-scale WAN
Azure maintains a massive WAN with significant capacity and one that is continuously growing. We have over 175,000 miles of lit fiber optic and undersea cable systems. This connectivity covers close to 200 network points of presence (PoPs) over 60 regions, across 140 countries.
Azure’s network is connected to many thousands of ISPs and other networks with significant peering capacity. Our global network is well-provisioned, with redundant fiber paths that can handle multiple simultaneous failures, it also has massive reserve capacity in unlit dark fiber. These optical fibers are fully owned or leased by Microsoft, and all traffic between and among Azure datacenters within a region or across regions is automatically encrypted at the physical layer.
This combination of redundant capacity to handle failures, dark capacity for significant growth, and research advancements being made in increasing transmission speeds means that we have a massive amount of spare capacity to serve 5G traffic to a broad array of new operators.
Bahl said Microsoft is selling its network services to large, established 5G network operators that already manage their own routing and transport operations, as well as newer telcos that may not have developed such systems. Under Microsoft’s vision, 5G network operators can focus on erecting cell towers and central offices, but can rely on Microsoft’s Internet backbone to carry their customers’ traffic from those locations across the U.S. and the rest of the world.
Making Azure WAN great for 5G traffic
For many years, Microsoft researchers and engineers have been working on a hybrid-global traffic orchestrator for routing network packets across Azure’s WAN. Our orchestrator takes control away from classic Internet protocols and instead moves that control into software that we build and control for 5G traffic. We place the 5G flows that demand high performance on low-latency, high bandwidth paths to and from the Internet. Network flows that are cost-sensitive are instead routed through cheaper paths.
In effect, we have developed a fast-(packet) forwarding mechanism to build a 5G overlay on our existing WAN, thereby supporting a variety of 5G network slices with different wired transport properties, while avoiding interference with the operation of the underlying enterprise cloud network.
We have also extended our state-of-the-art network verification capability to cover complex network topologies by modeling Virtual WAN, Virtual Networks, and other network function virtualizations (NFVs), as well as modeling reachability using formal methods. Using fast solvers, we can verify reachability constraints on customer topologies, at deployment time or when undergoing a config change.
We have applied machine learning to predict the impact of peering link outages and congestion mitigation strategies and use the data to improve the availability of the WAN peering surface area.
Our expertise in optimization algorithms has been shown to ultimately reduce cloud networking spend. Techniques like these will be invaluable in carving out 5G paths on the overlay that are cost-efficient, but still meet the performance needs of every network slice.
The significant upside for operators
To reiterate, Microsoft is heavily invested in running a well-managed, always-available global network. We have been incorporating multiple groundbreaking technologies, including scalable optimization, formal verification of routing policies, machine learning, and AI. We envision operators to not only be able to use our WAN to transfer 5G packets, with low latency, but also to benefit from multiple network services such as DDoS protection, firewalls, traffic accelerators, connection analytics, load balancers, and rate limiters, many of which we use in running existing Azure network workloads.
At Microsoft, we bring the full power of research and engineering leadership into our networks, rapidly incorporating innovation and new features to provide reliable, low-latency, low-cost service. In turn, this effort will open up the significant potential of next-generation services and applications as envisioned by the community at large. It is no understatement to say that collaboration between operators and Azure is key to unleashing the true power of 5G.
Last year Microsoft acquired telecom software vendors Affirmed Networks and Metaswitch Networks, and subsequently introduced its Azure for Operators to “provide operators with the agility they need to rapidly innovate and experiment with new 5G services on a programmable network.” The company earlier this year doubled down on the opportunity with the purchase of AT&T’s Network Cloud operation, a move that positions AT&T to shift its 5G core network operations into Microsoft’s cloud over the next three years.
More broadly, Microsoft is one of a trio of massive cloud computing companies that are hoping to generate sales among telecom companies, including 5G network operators. Google, Amazon Web Services (AWS) and Microsoft are all now selling various products and services into the telecom space.
Several telecom network providers including Canada’s Telus and Deutsche Telekom – are jumping at the prospect of partnering with a cloud computing service provider. Of note is Dish Network’s massive deal with AWS, whereby it plans to run all of its network software in the Amazon cloud and AT&T outsourcing its 5G SA Core network to run on Microsoft Azure cloud.
AT&T 5G SA Core Network to run on Microsoft Azure cloud platform
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