The cloud market remains hot, and some of the top providers, including IBM and Microsoft, are looking to add to the capabilities and services in their cloud offerings to make further inroads into enterprises and government agencies.
According to recent reports from market research firms IDC and Gartner, cloud infrastructure spending jumped sharply in 2020 – accelerated by the COVID-19 pandemic – and continued that trend in the first three months of this year.
Gartner analysts said worldwide spending in the infrastructure-as-a-service (IaaS) space in 2020 hit $64.3 billion, a 40.7 percent jump over the $45.7 billion spent in 2019. According to Sid Nag, research vice president at Gartner, the increase was due to the rise in hybrid cloud and edge computing demands and the pandemic.
“Hyperscale providers are continuing to build distributed cloud and edge solutions that extend the public cloud’s reach into private and on-premise locations, addressing the needs of organizations relating to data sovereignty, workload portability and network latency,” Nag said in a statement. “This fact, coupled with reliance on the public cloud by a majority of organizations during the pandemic, drove another year of double-digital market growth in 2020.”
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A Strong Q1 for the Cloud
For their part, IDC analysts said that spending on cloud infrastructure products, including compute and storage offerings, rose 12.5 percent year-over-year in the first quarter, to $15.1 billion. By comparison, spending on non-cloud infrastructure increased 6.3 percent during the same time, to $13.5 billion. They also noted the role the global public health crisis has played in driving organizations to the cloud, saying the increased reliance on cloud platforms will continue even after the pandemic lifts.
That can be seen in IDC’s forecast going forward. The analysts expect spending on cloud infrastructure will grow 12.9 percent for all of 2021, to $74.6 billion, while that of non-cloud infrastructure will increase only 2.7 percent, though even that is positive after two years of declines.
Gartner’s numbers found that Amazon Web Services (AWS), with a 40.7 percent share, and Microsoft Azure (19.7 percent) own more than two-thirds of the global IaaS public cloud market, followed by the likes of Alibaba, Google and Huawei. The numbers echoed what analysts at Synergy Research Group found in its earlier first-quarter report, which tagged AWS and Azure as the clear market leaders.
AWS and Azure Dominate
John Dinsdale, chief analyst at Synergy, said in a statement that the dominant positions held by the top two players were a testament to their relentless focus on expanding their cloud services offerings and investing in their data center footprint.
“These two don’t have to spend too much time looking in their rearview mirrors and worrying about the competition,” Dinsdale said. “However, that is not to say that there aren’t some excellent opportunities for other players. Taking Amazon and Microsoft out of the picture, the remaining market is generating over $18 billion in quarterly revenues and growing at over 30 percent per year. Cloud providers that focus on specific regions, services or user groups can target several years of strong growth.”
Microsoft and IBM Grow Services
Cloud providers in recent weeks have been bulking up their services and adding partnerships to meet growing enterprise demands around hybrid and mulitcloud. At Microsoft’s Inspire conference last week, officials unveiled several updates to the Azure cloud platform. Those include adding support for Hyper-V’s Automatic Virtual Machine Activation tool in Azure Stack HCI, the company’s hyperconverged infrastructure solution that enables organizations to run Azure services in their on-premises data centers. The move will ease the management of virtual machines running Windows Server in a hybrid cloud environment.
Microsoft’s Azure Migration and Modernization Program will let enterprises know how well their on-premises workloads will run in Azure and how much it will cost, while the vendor later this year will launch the Microsoft Cloud for Sustainability tool to help it and its users reach carbon reduction and sustainability goals.
In addition, longtime Microsoft partner NEC will adopt Azure as its preferred cloud platform for services it offers its customers and will migrate NEC’s own IT environment to Azure.
IBM this month said it is buying two companies that will help Big Blue continue its evolution into a hybrid cloud services and software provider with a strategy based on the OpenShift platform inherited when it acquired Red Hat in 2019. IBM’s acquisition of Bluetab Solutions Group, announced last week, will add to Big Blue’s portfolio of data and hybrid cloud consulting services and help enterprises in their cloud migration efforts. OpenShift is among the tools in Bluetab’s portfolio.
IBM also announced recenty that it is acquiring startup BoxBoat, a DevOps consultancy and Kubernetes service provider that officials said will improve the company’s container strategy and implementation services, driving IBM’s hybrid cloud efforts and global adoption of OpenShift.
IBM’s Buying Spree
The acquisitions are part of a larger buying spree dating back more than a year that has seen IBM grab such companies as hybrid cloud consultancy Taos, AI automation specialist myInvenio, StackRox (a container and Kubernetes security firm) and performance management company Turbonomic.
According to Charles King, principal analyst for Pund-IT, it’s important for cloud providers to develop new services, but what’s key is ensuring they’re designed to address or improve the enterprises’ business and technical requirements.
“Microsoft’s new Windows 365 [for PCs, another service announced last week] and IBM’s acquisition of Bluetab are good examples of this,” King told InternetNews. “The former extends the cloud-based model Microsoft is successfully delivering with Office 365 and is built on (but doesn’t replace) its Azure Virtual Desktop. Most importantly, the new offering is designed to deliver a uniform Windows [user experience] across heterogeneous platforms, including Wintel PCs, Linux systems and Apple devices.”
The Bluetab acquisition “is more finely focused on helping enterprises successfully adopt hybrid cloud,” he said. “Some of those efforts will be driven by [Bluetab’s] Truedat tools and FastCapture solutions while others will engage the Bluetab staff members who join IBM’s Global Business Services.”
What kinds of services providers should focus on depends on the individual customer, the analyst said, adding that hybrid cloud “is the antithesis of a ‘one size fits all’ offering.” Given that, services need to be tailored to address those individual needs.
“That said, certain cloud solutions are evolving to address emerging requirements, like IBM Watson AIOps, which leverages the company’s Watson AI [artificial intelligence] platform to effectively automate and manage labor-intensive IT tasks, including hybrid cloud,” King said.