It should come as no surprise to managed service providers (MSPs) that consumption of cloud infrastructure increased considerably in 2020 as a result of the COVID-19 pandemic. However, a 41 percent increase in spending on a base of $45.7 billion in 2019 is nothing less than astounding. The issue on everyone’s mind today is how permanent is this shift to cloud really going to be.

Gartner this week reported the worldwide infrastructure as a service (IaaS) market reached $64.3 billion in 2020. Not surprisingly, Amazon Web Services (AWS) and Microsoft continue to lead the cloud service provider pack. AWS led the worldwide IaaS market with $26.2 billion of revenue in 2020 for a 41 percent market share, followed by Microsoft with $12.7 billion for a 20 percent market share. AWS grew at a 29 percent clip over 2019, but still lost two points of market share. Microsoft, conversely, grew at a rate of 59 percent and gained two points of market share on a year-over-year basis.

Alibaba comes in third with a 10 percent market share on $6 billion in revenue, followed by Google with a 6 percent market share at $3.9 billion. Huawei comes in fifth with a 4 percent market share at $2.77 billion.

Overall, Gartner notes the top five IaaS providers accounted for 80 percent of the market in 2020, and nearly 90 percent all IaaS providers saw some level of growth. A flood is clearly lifting all the proverbial boats to varying degrees.

Given those growth rates, it’s easy to conclude that an increasing number of workloads are shifting to the cloud. Gartner has even gone so far as to forecast 40 percent or all enterprise workloads will be deployed on cloud infrastructure and platform services by 2023. However, it’s worth noting that trillions of dollars in IT spending still occurs within the context of on-premises IT environments. Providers of these platforms are now also starting to see significant sales growth as the COVID-19 pandemic continues to ebb, and IT teams head back into local data centers.

MSPs must start gearing up for the next era of the cloud

A titanic battle for control over the future of enterprise computing has begun in earnest, with the rise of distributed cloud computing environments, through which IT organizations will one day centrally manage application environments, spanning everything from the edge to the cloud.

A day is coming soon when the whole notion of cloud computing will simply dissipate. In its place will be a federated set of IT services that will enable data to be processed and analyzed much closer to the point where it is created and consumed. Aggregated subsets of that data will then be shared with backend systems of record running in the cloud or in a local data center. The days when massive amounts of data were moved into the cloud will soon wane as organization once again realize it is both less expensive and more secure to bring compute closer to where the data actually resides.

In the meantime, MSPs should keep one eye on there the workloads are today. However, the other eye should be focused in the direction of edge computing platforms as the application workload pendulum inevitably starts to swing away from cloud computing as it is known today.

Photo: Brian A Jackson / Shutterstock

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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