Amazon Web Services Inc. (AWS), the main beneficiary of the increasing expenditure on cloud infrastructure services, is Canalys research firm. It was estimated that $8.2B in the first quarter of 2015, and $190B by 2020.
The company released a statement last week saying that the dramatic shift in datacenter spending from on-premises to service provider deployments continues in 2016, as cloud infrastructure services accelerates.
Despite the increasing adoption of cloud services by enterprises, the company pointed out that consumer-centric services are the main growth driver, as more people use cloud services for video streaming, content storage, and gaming.
Analyst Daniel Liu stated that “Use will continue growing as smart phones become more widespread, high-speed connectivity becomes ubiquitous, bandwidth restrictions ease, and new content-driven applications emerge.” “The combination cloud and mobile has allowed new business models and tech start ups to emerge, giving instant access billions of customers via online markets.”
Matthew Ball, a colleague, picked up on the idea.
Ball stated that the push by Amazon, Google, Microsoft, and IBM SoftLayer for datacenter capacity to businesses is also having an impact on the IT industry.
Canalys stated that more than half the servers shipped this year will be to datacenters offering cloud infrastructure services. However, it stated that these deals are primarily low-margin and increasingly white boxes. This affects both vendors and channel partners who sell compute and storage.
Ball said that datacenters are growing rapidly and being managed by a larger number of providers. “The top four providers accounted almost 60 percent of Q1’s total market, up from just under 45 percent two-years ago. Amazon is the leader with 30 percent. Virtually every software company supports this move by prioritizing the development and expansion of their cloud offerings.
UBS, another analyst, identified IBM as the latest addition to the group of “top four providers” in an article published by Investors Business Day. Each vendor showed strength in different areas.
“While AWS … and Google are strongest in infrastructure-as-a-service (IaaS), Microsoft’s Azure service and IBM are formidable in platform-as-a-service (PaaS), according to the UBS survey of corporate information technology executives,” the article stated. Customers rent computers and data storage over the Internet in the IaaS market. PaaS is where companies sell software and applications, including business management services, that runs on cloud infrastructure.
Investors Business Daily quoted UBS saying that “Cloud isn’t a winner-takes-all market.” “We believe that the ‘big’ will get bigger — AWS, Microsoft and Google will be winners, with IBM still holding its own.
Based on UBS estimates of revenue exposure (Rackspace (RAX), Nimble, Pure Storage (PSTG), Brocade [BRCD], Hewlett Packard Enterprises (HPE), and NetApp [NTAP] are the likely losers.”
It seems that $190 billion can only be cut in so many ways.
