Cloud services continue to record strong growth

14.02.2019 1,380 1

Martin Deshev

The popularity of cloud services continues to rise with every quarter. The latest data from Canalys shows that Q4 of 2018 was characterized with strong gains for the cloud services.

Leading the pack are Amazon Web Services and Microsoft Azure. No surprises there. AWS earned about $7 billion in revenue which is a 46% year-on-year jump. Azure, on the other hand, netted $4 billion – a 76% jump.

“AWS maintained momentum due to traction from its enterprise customers, while Microsoft’s progress benefits from its longstanding hybrid IT initiatives, taken up by its large base of on-premise customers… Businesses accelerated digital transformation projects and workload migration. This is set to continue in 2019, with more customers adopting multi-cloud strategies, including hybrid IT”, says Canalys research analyst Daniel Liu in a release.

The cloud infrastructure is expanding

The rise of cloud customers and revenue means the providers work hard to improve and expand their infrastructure. Canalys says AWS has already got 60 locations worldwide and is currently building 12 more mostly in Asia and Africa. As a result of the expansion, Amazon’s Capex was $26 billion in 2018.

Microsoft, on the other hand, has 54 cloud locations and is building or planning 10 more, mostly in Western Europe and Africa. The company’s Capex was $14 billion in 2018 which increased 64% year-on-year. In comparison, Amazon’s Capex growth slowed down to 7%.

“The investment needed to build new interconnected cloud data centres is huge, and due to the constant pressure to optimise data centre operating costs, refresh cycles are shorter as they drive innovation,” said Liu. Currently the providers are focusing more on capacity utilization and this will reflect their Capex numbers for the first half of 2019, too.

Even more stats show big promise

Statista and RightScale’s data on current and planned usage of public cloud platform services running applications in 2018 is also quite interesting. It shows that 80% of enterprises either run or experiment with apps on AWS. 67% do the same with Azure and 18% – with Google’s Cloud Platform.

Enterprise adoption is also on the rise. Azure nets a jump from 43% to 58%, while AWS – from 59% to 68%. It’s clear that most enterprises do not rely on a single provider. Instead, they use the services of several platforms. Popular uses for the cloud are enterprise SaaS, Financial services, Insurance and Healthcare.

Wikibon expects that the True Private Cloud (TPC) market will continue to grow every year. It forecasts that TPC will have reached $262.4 billion by 2027. Gartner, on the other hand, expects the worldwide Public Cloud Services Market to grow by 17.3% in 2019 reaching $206.2 billion.

Finally, Gartner also predicts that the shift to the cloud will have a profound effect on IT spending. More than $1.3 trillion will be affected by this process by 2022.

Basically, the cloud market is ramping up and getting hotter and hotter. It will be a few more years before it reaches the plateau and the competition is going to be quite intense.