Cloud Computing Adoption Isn’t Slowing — Need to Convince Clients?
If you’re looking for compelling stats for your presentations, we’ve got you covered, including with our takes.
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First-quarter capex among the world’s hyperscaler operators rose 31% over last year, reaching $38 billion. That, says Synergy Research Group, brings the total for the last four quarters up to more than $149 billion, compared to $121 billion in the previous four quarters.
Amazon Web Services, Microsoft Azure and Google Cloud Platform accounted for the top three hyperscaler spenders over the last four quarters. Their capex budgets far exceeded those of their peers. Much of that capex fueled the building, expansion and equipping of data centers, which grew in number to 625 by the end of the first quarter.
“Given the ongoing growth in service revenues for hyperscalers and the ever-increasing need for a larger global data center footprint, we are forecasting continued double-digit growth in hyperscale capex for several years to come,” said John Dinsdale, a chief analyst at Synergy Research Group.
Source: Synergy Research Group, “Hyperscale Operator Capex Keeps on Setting New Records – Reaches $150 Billion in Last Four Quarters”
Channel Futures’ take: These results come as little surprise. COVID-19, as everyone knows, pushed organizations into cloud computing adoption sooner than many had planned. The giant cloud providers stood best-positioned to respond quickly and with extensive resources, including personnel, budget, and ongoing research and development. In addition, the first three cloud providers Synergy Research Group points out – AWS, Microsoft and Google – likely enjoyed significant push from the channel. Managed service providers, VARs, consultancies and other partners found themselves in high demand during the pandemic, and the aforementioned vendors operate large channel programs.
Here’s an interesting perspective: Sinequa attributes the hyperscalers’ growth to third-party marketplaces.
The company, which specializes in enterprise search, conducted its own research to uncover organizations’ interest in cloud marketplaces. Here are some of the results:
· Ninety-three percent of cloud enterprise professionals turn to AWS, Google and Microsoft because of the strength and breadth of their third-party marketplaces.
· Ninety percent of respondents plan to purchase products or services from one of those marketplaces.
· Seventy percent credit cloud marketplace convenience as the biggest draw.
On average, organizations run eight different marketplace-purchased services, Sinequa found. The most popular categories ranked as follows:
· Databases – 58%
· Analytics – 51%
· Storage – 51%
· Security – 46%
Blockchain, however, is a fast up-and-comer. Respondents told Sinequa they plan to ramp up their use of blockchain via cloud marketplaces by 112%.
Source: Sinequa, “Sinequa Finds Third-Party Marketplaces Are Driving the Growth of Hyperscale Clouds”
Channel Futures’ take: There’s no doubt that cloud marketplaces represent a significant piece of the cloud pie. They offer channel partners and their customers access to apps and services vital to conducting business in the digital era. Channel partners who haven’t hopped aboard the cloud marketplace train need to do so now or get left behind. As Forrester’s Jay McBain told us last year, “Be on the forefront of this, ahead of your competitors for once.” That will give you the resources to serve as a cloud marketplaces expert to your clients and further guide their digital transformation.
Expect to discuss “distributed cloud” more often this year with customers and prospects. Distributed cloud, as Gartner defines it, delivers public cloud services to different physical locations, while the operation, governance, updates and evolution of the services remain the responsibility of the originating public cloud provider. In other words, cloud services sit in local or semi-local subnets, and can operate untethered if needed.
Now, new research from Ensono indicates the topic of distributed cloud will grow more popular throughout 2021. IT leaders in the United States and the U.K. told the hybrid IT services provider the top reasons for considering distributed cloud include its ability to:
· Cut down on network issues.
· Reduce inefficiencies with the control plane.
· Remove latency.
· Work in different locations.
“Distributed cloud provides us with a window into the future of public cloud,” said Sean Roberts, general manager of public cloud at Ensono. “By unmooring public cloud services from being tied to a fixed location, enterprises have the freedom to rethink the possibilities of cloud architecture, moving public cloud workloads to wherever they are needed in a business’ infrastructure. This is a particularly important asset for compliance, enabling firms to keep up with shifts in regulation and easily adjust data location – backed by continuous control, monitoring and support from the public cloud provider.”
Ensono’s findings, by the way, correlate with statistics from IndustryARC. That firm projects the distributed cloud market to grow by as much as 24%, reaching $3.9 billion, by 2025.
Sources: Ensono; IndustryARC, “Data Storage Market– Forecast (2021-2026)”
Channel Futures’ take: Distributed cloud platforms include AWS Outposts, Google Anthos and Microsoft Azure Stack. These products give channel partners the tools to better manage the physical location of customers’ data – a critical consideration as governments worldwide tighten their regulations over where data reside. Indeed, a third of the IT leaders Ensono surveyed said distributed cloud gives them more power to comply with regulatory requirements on data location. Ensono’s results reflect the rising interest in distributed cloud and the capabilities it supports.
As more organizations undergo digital transformation, they won’t just look to distributed cloud. Hybrid cloud, too, represents a cloud model vital to helping end users implement technology for business outcomes. (And, arguably, hybrid cloud contains distributed cloud, but that’s another tangent.) Those results come from 94% of IT leaders surveyed by CloudBolt and Pulse.
Source: CloudBolt and Pulse, “The Truth About Hybrid Cloud and Digital Transformation”
Channel Futures’ take: Organizations require flexibility in cloud configurations. Hybrid cloud – any combination of public and private cloud platforms – lets channel partners craft custom and targeted environments for their customers. Of course, someone has to manage those setups. One of the biggest areas to watch is cost. As clients pursue “digital transformation” – which we take to mean upgrades to technology and processes that support efficiency and strategic action – they must keep an eye on cloud expenses. Hybrid cloud arrangements will call for partners to deploy platforms that consolidate all the different brands into one portal for complete insight and control. (To that point, CloudBolt and Pulse found that 80% of respondents view real-time insight into cost optimization and security remediation as essential.) That’s a tough mandate to meet right now, but we think the industry will get there.
Your customers may rank among those who predict ongoing impact on their businesses from COVID-19. If so, they are not done moving to the cloud. Database provider MariaDB has new stats from a global survey that show 84% of respondents expect the pandemic’s effects to keep influencing technology decisions. Almost three-quarters (74%) forecast a second wave of COVID-19 impact; thus, 51% of those respondents plan to move more applications to the cloud as a result. Right now, 40% continue to accelerate their shifts to the cloud.
Source: MariaDB, “COVID-19’s Impact on Cloud Adoption”
Channel Futures’ take: The past year of upheaval will generate ripple effects for some time. Organizations worldwide have come to understand the value of cloud infrastructure, services and applications as they rushed to support remote work. Those takeaways will not diminish, even as the pandemic subsides. Channel partners must keep educating customers and prospects about the benefits of cloud environments. They support flexible, agile and creative approaches to work. And, while not inexpensive, they do remove clunky overhead capex.
A little more than 60% (63%) of analytics professionals in the United States say their organizations know about analytics, according to a new report from Deloitte. But they don’t have the necessary infrastructure to use them to their fullest capacity. In addition, many businesses keep their various analytics in silos, further reducing any effectiveness they might gain from them. The cloud, and related data-modernization strategies, are inextricably linked to analytics, as Deloitte noted. Organizations should therefore use cloud to enable data consolidation, analytics and intelligence through machine learning and insight. Along those lines, research firm Markets and Markets forecasts the global cloud analytics market to grow by 25% to $65.4 billion by 2025.
Sources: Deloitte Insights, “A New Framing for Cloud Innovation;” Markets and Markets, “Cloud Analytics Market”
Channel Futures’ take: As cloud computing adoption soars, channel partners and their customers must take advantage of analytics. Frankly, having access to piles of big data – and doing little or nothing with it – will only hurt the organization. If a business doesn’t evaluate and act on trends and patterns, it misses the chance to make important adjustments. In an increasingly digital world, this will mean lagging the competition – if it doesn’t already. Channel partners must advise their clients to implement analytics platforms, and guide them in doing so.
A little more than 60% (63%) of analytics professionals in the United States say their organizations know about analytics, according to a new report from Deloitte. But they don’t have the necessary infrastructure to use them to their fullest capacity. In addition, many businesses keep their various analytics in silos, further reducing any effectiveness they might gain from them. The cloud, and related data-modernization strategies, are inextricably linked to analytics, as Deloitte noted. Organizations should therefore use cloud to enable data consolidation, analytics and intelligence through machine learning and insight. Along those lines, research firm Markets and Markets forecasts the global cloud analytics market to grow by 25% to $65.4 billion by 2025.
Sources: Deloitte Insights, “A New Framing for Cloud Innovation;” Markets and Markets, “Cloud Analytics Market”
Channel Futures’ take: As cloud computing adoption soars, channel partners and their customers must take advantage of analytics. Frankly, having access to piles of big data – and doing little or nothing with it – will only hurt the organization. If a business doesn’t evaluate and act on trends and patterns, it misses the chance to make important adjustments. In an increasingly digital world, this will mean lagging the competition – if it doesn’t already. Channel partners must advise their clients to implement analytics platforms, and guide them in doing so.
Even as COVID-19 winds down, cloud computing adoption will stay high. Channel partners know this, but their prospects and customers might think they can put the brakes on deployments.
Big mistake.
The pandemic simply sped up the inevitable. MSPs, VARs, consultants and other partners might need some extra firepower convincing clients (and potential clients) of this reality. So we’ve compiled some curated cloud research, featuring Channel Futures’ analysis on each finding, for you to use in your sales and marketing presentations. Of course, if you just want to bolster your own insight into cloud computing adoption trends, this information serves that purpose, too.
See the slideshow above for all of the takeaways.
Want to contact the author directly about this story? Have ideas for a follow-up article? Email Kelly Teal or connect with her on LinkedIn. |
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