As the end of a year, and indeed a decade, approaches, it seems like a fitting time to look back on the public cloud market, and reflect upon it. From humble beginnings in 2006, when Amazon Web Services was launched, to the announcement by Microsoft in 2008 of what would become Azure (as the BBC might say, other cloud providers are available), to the worldwide revolution that now enables startup businesses to release their software products to market and quickly scale to cope with demand without having to invest in datacentres and hardware. Whichever your cloud provider of choice, there is no denying that public cloud has changed the way that businesses large and small, the world over view and use IT.
Looking at some of the numbers for cloud growth, it certainly seems as though the sky is the limit for the public cloud market. According to research firm Canalys, the global cloud market grew by 37% in Q3 2019 alone. The top three cloud players (the aforementioned Amazon Web Services, Microsoft Azure and the, until now unmentioned, but certainly not unmentionable, Google Cloud) account for over half of the worldwide cloud infrastructure services. When you consider that this market reached US$27.5 billion in Q3 2019, this is a staggering amount of revenue to be shared (not equally, I hasten to add) amongst these three global hyperscalers.
Where does the rest of the cloud revenue go?
If over half of the cloud infrastructure services revenue goes between Amazon, Microsoft and Google, then where does the rest go? When you look at the rest of the cloud infrastructure as a service market, there are some other key contenders that Gartner acknowledge in their Magic Quadrant for Cloud Infrastructure as a Service. Their Niche Players are Alibaba Cloud, Oracle and IBM. Alibaba Cloud has been gaining enormous traction within Asia, and are expanding their reach to the rest of the world, with data centres in the UK, Germany, the US, Australia and the UAE. With some fantastic customer success stories to their name, and some great use cases, it is likely that their growth trajectory will continue and they will almost certainly see their position within Gartner’s Magic Quadrant change as they continue to demonstrate their ability to execute and expand their completeness of vision. Much has been written of Oracle Cloud Infrastructure and IBM Cloud before now, and both have well-respected offerings as well as substantial customer bases. It is likely that both of these will continue to grow their revenue streams through the specific use cases that their customers come to them for. Obviously the entire public cloud market doesn’t consist of 6 companies though – outside of these, there are a multitude of regional cloud providers that offer specialised or geo-specific services to their clients.
Look to the future now, it’s only just begun
As Noddy Holder and his bandmates once wisely advised, look to the future. Most analysts firms like to do this on a regular basis, and our good friends at Gartner are no stranger to this practice. While their figures may be slightly different to those of Canalys, they still come to a similar conclusion – i.e. that the cloud market is growing, and there’s a lot of money being spent (and to be made) there. They predict a growth of 17% by 2020, with cloud system infrastructure as a service (IaaS) reaching US$50 billion by 2020. Gartner analyst Sid Nag stated, “at this point, cloud adoption is mainstream”, and that “adoption of next-generation solutions are almost always ‘cloud-enhanced’ solutions”. Most companies have by now found a use for cloud solutions within their business – whether using a hosted email system, archiving data in the cloud, using cloud servers to run applications, carrying out high performance computing tasks, running test and dev environments in the cloud, even running their entire business from cloud-based offerings.
It’s often said that the public cloud is right for many workloads, but not necessarily every single one. There are still use cases where enterprises will need to keep data or applications closer to home. In this ever-changing geopolitical climate, this is likely to continue and may increase, along with a rise in the revenues for regional cloud providers offering a more specialised, white glove service. That doesn’t mean that Amazon, Microsoft or Google will be out of the equation – with all of them recently introducing an on-premises version of some of their most popular cloud products (AWS Outposts, Microsoft Azure Stack and Google Anthos), they have cannily identified this potential market and are giving their customers freedom of choice of where to deploy. These introduce the opportunity for true hybrid cloud computing – being able to use the same environment and APIs on-premises as well as in public cloud and being able move data and workloads between the two with ease.
It’s not all servers and storage
There remains one key distinction to make – just because this blog has looked at the key players and revenue for infrastructure as a service, that doesn’t mean that’s all there is to public cloud. There are many different types of technologies available to businesses in the public cloud market, and one that we see growing quickly is containers. The dominant technology for container management is without a doubt Kubernetes. Sometimes referred to as the new operating system for the cloud, companies of all sizes are turning to Kubernetes and other, similar technologies to take advantage of the ability to easily isolate individual applications from each other into containers and schedule and orchestrate them. Growth is hard to tie down, as everyone has different figures, but research by Diamanti shows that adoption has grown from 17% in 2018 to more than 35% in 2019. An article from CloudTech points out that 451 Research predict the applications container market will continue to expand to be worth more than US$4.3 billion by 2022, growing at a compound annual growth rate (CAGR) of 30%.
Whether you’re using public cloud for servers, storage, databases, containers or something else, it’s clear that it’s not going anywhere. 2020 promises to be another bumper year in the cloud world, and it’s vitally important that companies find a trusted partner that can help them to simplify and accelerate their journey to the cloud. SUSE have been helping businesses to make better use of open source technologies for over 25 years, are a Kubernetes Certified Service Provider, and have partnerships with cloud providers big and small around the world. Our open, open source philosophy means that we help you to identify the right solutions for your needs, and won’t tie you into a single software stack. Get in touch with us today, and find out how SUSE can help you design, build and manage your future cloud infrastructure. From on-premises to public cloud, to hybrid and multi-cloud, SUSE open source cloud solutions enable you to innovate faster, reduce expenditure and simplify IT management.