public cloud competitionThe fight for control over application workloads moving into the public cloud is starting to resemble a knock-down drag-out brawl. The catalyst for this conflict is the accelerated rate at which application workloads are moving into public clouds.

A new global survey from 451 Research of 1,000 IT professionals finds that 60 percent of enterprises say they will run the majority of their IT outside enterprise data centers by the end of 2019, chiefly relying on cloud service providers or software-as-a-service (SaaS) applications. That shift is primarily benefiting Amazon Web Services (AWS) and Microsoft as the clear market leaders for public cloud services. In fact, Microsoft Azure appears to be gaining on AWS. A new report issued by the financial services firm KeyBanc estimates AWS had 62 percent market share in the most recent quarter, down from 68 percent a year earlier. Microsoft Azure jumped from 16 percent to 20 percent, and Google’s share increased from 10 percent to 12 percent.

KeyBanc estimates Azure likely contributed $3.7 billion to Microsoft’s fiscal 2017 revenue, which totaled an estimated $96.6 billion. That suggests Azure almost doubled year-over-year, but the KeyBanc report forecasts that growth will slow to 88 percent in 2018. In contrast, Amazon reported AWS grew 42 percent in the third quarter.

Future of the public cloud

The 451 Research report suggests this trend may continue for some time. More than a third (35 percent) of the organizations surveyed say they expect Microsoft will be their most strategic partner by the end of 2019, compared to 33 percent today. Only 17 percent say AWS will hold that position two years from now, and just 7 percent say AWS holds that position today. Obviously, AWS is substantially larger. But at this rate, it’s only a matter of time before the two cloud behemoths reach parity.

The 451 Report also provides some insights into what types of workloads are moving to the cloud. Nearly half (45 percent) of respondents cited business intelligence, followed by machine learning/artificial intelligence (29 percent) and Big Data (28 percent). All three of those workloads are naturally closely related.

Of course, IBM, Oracle, and Salesforce are all competing for a slice of that same cloud pie. What unifies them all is their shared goal of being able to host as much data as possible on their individual clouds. That data not only drives cost efficiencies that enable a cloud service provider to remain competitive, but it also provides the foundation on which a variety of data services will be built employing deep-learning algorithms.

For a managed service provider perspective, it’s clear the era of multi-cloud computing has arrived. AWS and Microsoft, for example, already share large numbers of customers. Those customers are trying to avoid getting locked into any single cloud service provider. Given the limited amount of IT expertise most organizations have at their disposal, multi-cloud computing represents a massive opportunity for MSPs. In fact, rather than thinking in terms of having a specific proverbial dog in the cloud fight, MSPs should be hoping that every dog has its day.

Ready Set Managed

Photo: Khakimullin Aleksandr/Shutterstock.com

Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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