AWS, Broadcom, Alibaba, Azure, Google: Big Week for Cloud Computing
From new investments and contractions to antitrust activity and generative AI, we have updates for you.
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Amazon Web Services has India in its sights.
This week, the world’s largest public cloud computing provider said it will invest $12.7 billion in the southeast Asian country by the end of the decade. That investment will translate into more than 100,000 full-time jobs annually, AWS said in a statement to Reuters on May 17. The roles will encompass engineering, telecom, construction and more.
AWS runs two data centers in India already — one in Mumbai, the other in Hyderabad. However, the additional billions will go toward more cloud infrastructure and services as demand in the region ramps up. To that point, research firm IDC forecasts India’s public cloud services market to reach $13 billion by 2026. That represents a compound annual growth rate of 23.1% between 2021 and 2026.
The $12.7 billion announcement comes as AWS’ parent company, Amazon, has laid off at least 500 people in India.
The saga that is the $61 billion pending acquisition of VMware by Broadcom continues.
Reports this week indicate that Broadcom on May 16 submitted interoperability remedies to the European Union’s antitrust arm. At the same time, the European Commission has extended its deadline for a decision on the transaction to July 17.
No one outside of the Broadcom-VMware proceedings knows what exactly Broadcom’s proposal contains.
Broadcom CEO Hock Tan did recently publish a blog saying the company would pour more money into VMware’s research and development efforts. That seemed to serve as an attempt to alleviate the European Commission’s concerns around a combined Broadcom-VMware’s technological interoperability approach. Antitrust regulators have said they fear Broadcom will use the VMware purchase to restrict competition on certain components and software, and raise prices.
Regardless of the obstacles it has encountered, Broadcom is putting on a brave face. The company told several media outlets this week that it still expects to close the VMware deal in the 2023 fiscal year.
Chinese e-commerce behemoth Alibaba will spin off its cloud division into a separate public company.
That news came this week as Alibaba missed quarterly revenue expectations.
Executives said they will turn the Cloud Intelligence Group into its own firm, “with intention for it to become an independent publicly listed company,” company CEO Daniel Zhang said, according to CNBC.
Wedbush Securities analysts Dan Ives said he sees the move as a “no-brainer,” per CNBC.
“We believe this was a step in the right direction for the Alibaba story,” Ives told the media outlet.
Gartner last year named Alibaba the world’s third-largest public cloud infrastructure vendor, with 9.5% market share.
Alibaba Cloud Intelligence Group works with some U.S.-based channel firms including Rackspace and Lumen.
On a more channel partner-centric note, Alibaba Cloud this week made several announcements during its partner summit in Singapore.
For instance, independent software vendors can expect more financial rewards and technical support as Alibaba Cloud seeks to expand its presence in Southeast Asia. The extra help will see the cloud provider work with ISVs to make the most of their listing fees on its marketplace, and sell more of their capabilities through its direct sales teams and channel partners. It’s also boosting its tech support for ISVs to help them build, publish and operate on the Alibaba Cloud platform.
Alibaba further unveiled its new partner portal, which houses product and service training and certifications, educational content and more. In addition, it’s offering new discounts and rebates to resellers and distributors as it invests $1 billion in its global partner base.
Finally, the cloud provider said it is collaborating with IBM to develop security solutions and with Avalanche to do blockchain.
“All new initiatives underscore how much value we place on our partners,” said Edward Cai, chief commercial officer at Alibaba Cloud.
This should come as little shock to anyone who’s been following cloud computing earnings of late: IaaS revenue has fallen.
That’s the word from IT research firm Context. A new report from the company shows IaaS revenue growth dropped 9% between the fourth quarter of 2022 and the first quarter of 2023.
However, Context said (in an observation that aligns with that of other industry observers), the numbers likely will bounce back later this year. That’s because the economic downturn will not last forever and, even while the market remains depressed, organizations still are pursuing digital transformation and relying on cloud to help them navigate challenges.
Context’s report comes as the major public cloud providers are showing slowing revenue because customers are doing better at optimizing existing resources now that pandemic-spurred deployments have waned.
Channel partners who work with Kyndryl and SAP soon will have more resources to lean on from the two companies.
At SAP Sapphire this week, the vendors said they’ve created a so-called digital blueprint that lets customers and partners plan, in detail, their migrations from legacy SAP ERP systems to the cloud-based SAP S/4HANA. The blueprint draws on an individual enterprise’s data to deliver that guidance, so CIOs and other IT leaders can make choices based on their unique requirements.
At the same time, SAP is beefing up its SAP Business Transformation Center. This resource supports the migration of SAP environments to the cloud.
Broadcom and VMware aren’t the only cloud-focused companies attracting scrutiny from European antitrust regulators.
News arose this week that European Commission authorities are looking into Microsoft Azure, concerned that the world’s second-largest public cloud computing provider is using its market power to edge out rivals.
Media outlet Bloomberg said it saw documents that confirm regulators are quizzing Azure competitors and customers. Commissioners are conducting an informal probe, Bloomberg said, to uncover whether Microsoft is abusing its access by using confidential information to compete with other cloud providers.
Apparently, several cloud firms, including an industry group linked to AWS, have made complaints about Microsoft’s behavior.
“The commission has received several complaints regarding Microsoft, including in relation to its product Azure, which we are assessing based on our standard procedures,” the European Commission told Bloomberg in an email.
Bloomberg noted that the timing coincides with Microsoft’s efforts to close its $69 billion purchase of Activision, the largest M&A deal of 2022 with Broadcom-VMware following at $61 billion.
The European Commission could open a formal antitrust investigation into the matter.
We round out this latest cloud news gallery with an observation from Google Cloud’s Bronwyn Hastings.
Earlier this week, on the heels of various AI-related announcements, we asked Hastings for some insight for partners. Generative AI, after all, has become all the rage and it seems every tech company is suddenly jumping in on the trend. Here’s what Hastings, vice president of Google Cloud’s ISV and channel ecosystem, told us:
“Generative AI has the potential to create new opportunities and unlock significant value for businesses, as well as for valued partners, including MSPs, resellers and solutions partners with implementation and delivery skills. Our partners will be a significant channel for bringing generative AI to customers and helping them see value quickly.”
Hastings’ statement came after Google Cloud joined IBM and Azure this week in announcing AI initiatives alongside SAP. And we can tell you, without disclosing any details yet, that partners can look forward to more AI news in the next week or so.
Photo courtesy Koshiro K/Shutterstock
We round out this latest cloud news gallery with an observation from Google Cloud’s Bronwyn Hastings.
Earlier this week, on the heels of various AI-related announcements, we asked Hastings for some insight for partners. Generative AI, after all, has become all the rage and it seems every tech company is suddenly jumping in on the trend. Here’s what Hastings, vice president of Google Cloud’s ISV and channel ecosystem, told us:
“Generative AI has the potential to create new opportunities and unlock significant value for businesses, as well as for valued partners, including MSPs, resellers and solutions partners with implementation and delivery skills. Our partners will be a significant channel for bringing generative AI to customers and helping them see value quickly.”
Hastings’ statement came after Google Cloud joined IBM and Azure this week in announcing AI initiatives alongside SAP. And we can tell you, without disclosing any details yet, that partners can look forward to more AI news in the next week or so.
Photo courtesy Koshiro K/Shutterstock
As the week comes to a close, you’ll find all the cloud computing news you might have missed right here.
Let’s start with the 500-pound gorilla, which is the largest public cloud computing provider talking up huge investments in the world’s most populous country. That’s right — Amazon Web Services is putting a lot of focus on India right now. Find out what that means for the people who live and work there.
Then we’ll move west a ways and assess what’s going on with the somewhat beleaguered Broadcom–VMware deal. While the $61 billion transaction has received blessings in other parts of the world, European regulators aren’t quite so keen on it, largely because of their feared implications for its impact on cloud computing on the continent.
From there we’ll shift gears back toward the east and talk about what’s happening with Alibaba Cloud. The company is making a significant decision about its cloud computing business. And it’s talking up new initiatives for channel partners.
Cloud Computing: IaaS Revenue
After that, check out some fresh – though not entirely shocking – data on infrastructure-as-a-service revenue. We say “not entirely shocking” because if you’ve been tracking cloud earnings, the new analysis will come of interest but no great surprise.
Next, Kyndryl and SAP shared a big announcement at this week’s SAP Sapphire event.
But speaking of (potential) surprises, and switching back to Europe, Microsoft Azure has come up antitrust scrutiny. The second-largest public cloud computing vendor is facing some questions from regulators.
Finally, as generative AI consumes the cloud computing sector, we share some thoughts from Google Cloud’s Bronwyn Hastings.
Check it all out by clicking on the image above.
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